GBP/JPY drops to 1-1/2 week low, below 137.00 mark ahead of Carney
|- Persistent Brexit uncertainties continue to dent sentiment surrounding the GBP.
- Risk-off mood benefits the JPY’s safe-haven status and adds to the selling bias.
- Traders now eye BoE Governor Carney’s speech for some short-term impetus.
The GBP/JPY cross tumbled below the 137.00 handle to hit 1-1/2 week lows in the last hour, albeit managed to recover few pips thereafter.
The cross extended this week's retracement slide from the 138.35-30 supply zone and remained under some bearish pressure for the third consecutive session on Friday, also marking its fourth day of negative move in the previous five.
Against the backdrop of the Labour party's failed motion to stop a no-deal Brexit, the fact that frontrunner Boris Johnson received an impressive 114 votes added to fears of a no-deal split and kept exerting some pressure on the British Pound.
Given that Johnson has already cleared his stance by saying that he is not looking to extend Article 50 and is also ready to leave the EU on October 31st, a no-deal Brexit still remains very much on the table and might continue to undermine the Sterling.
Apart from this, deteriorating global risk sentiment, amid fears of a further escalation in trade tensions between the world’s two largest economies, continued benefitting the Japanese Yen’s safe-haven status and further collaborated to the pair’s ongoing slide.
Despite a combination of negative factors, the downside remained cushioned as investors now look forward to the BoE Governor Mark Carney’s scheduled speech – later during the early North-American session, for some meaningful trading impetus.
Technical levels to watch
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