- GBP / JPY failed to capitalize on yesterday’s strong intraday positive move.
- The revival of safe haven demand benefited the JPY and put pressure on the cross.
- Any subsequent decline could still be seen as a buying opportunity and remain limited.
The GBP / JPY cross maintained its offered tone throughout the mid-European session and was last seen trading near the low end of its daily trading range, around the 139.65 region.
The cross continued their struggle to find acceptance / build on momentum beyond the key psychological 140.00 mark and witnessed an intraday turnaround on Wednesday. The pullback was exclusively sponsored by the revival of demand for the safe haven Japanese yen in a softer tone surrounding the stock markets.
Concerns about the US economic recovery resurfaced after the disappointing release of the Conference Board’s consumer confidence index on Tuesday. Market concerns partially offset optimism about a potential vaccine / treatment for coronavirus disease and weighed on global risk sentiment.
On the flip side, the British pound was seen consolidating solid gains overnight and did little to influence the GBP / JPY crossover. Sterling bulls did not appear to be affected by the lack of progress in Brexit negotiations and even ignored a weaker British CBI distribution trade survey, showing sales fell 6% in August.
The GBP / JPY cross has now eroded some of the positive move from the previous day, although any subsequent slippage could attract lower buying near the 139.00 horizontal support. Failure to defend the mentioned level could result in technical sell-off and make the cross vulnerable to return to region 138.25.