GBP/JPY reverses intraday dip to over one-week lows, flat-lined above mid-137.00s
- GBP/JPY witnessed some follow-through selling for the second straight day on Thursday.
- Traders refrained from placing aggressive bets and preferred to wait for fresh Brexit updates.
- An offered tone surrounding the safe-haven JPY further extended some support to the cross.
The GBP/JPY cross has managed to rebound around 50 pips from over one-week lows and was last seen trading in the neutral territory, around the 137.70 region.
The cross added to the overnight losses and witnessed some follow-through selling during the first half of the European trading action on Thursday. The downward momentum confirmed a near-term bearish break through a four-day-old trading range and dragged the GBP/JPY cross to daily swing lows, around the 137.20 region.
The British pound was pressured by reports that European leaders will demand the European Commission to publish no-deal plans. The downtick, however, lacked follow-through in the absence of any official confirmation. This, along with an offered tone surrounding the safe-haven Japanese yen assisted the GBP/JPY cross to bounce off lows.
Meanwhile, concerns about the economic fallout from the ever-increasing coronavirus cases continued weighing on investors' sentiment. This, in turn, extended some support to the JPY and capped the attempted recovery move. Investors also preferred to wait for fresh Brexit updates before placing aggressive directional bets.
An EU diplomatic source confirmed that the EU's chief Brexit negotiator Michel Barnier is going ahead with a briefing to update envoys of the bloc's 27 member states on the latest in trade talks with Britain on Friday. In the meantime, the broader market risk sentiment will be looked upon for some short-term trading opportunities.
Technical levels to watch