GBP/JPY climbs to session tops, around 140.00 handle
Reviving safe-haven demand benefitted the JPY and exerted some pressure.
A modest pickup in the GBP demand helped limit losses/bounce off daily lows.
The upside is likely to remain limited amid persistent UK political uncertainty.
The GBP/JPY cross reversed an early dip to two-week lows and is currently placed at the top end of its daily trading range, closer to the key 140.00 psychological mark.
The safe-haven Japanese Yen gained some traction at the start of a new trading week amid a slight deterioration in the global risk sentiment and was seen exerting some downward pressure on the cross.
A modest GBP strength offsets reviving safe-haven demand
Fresh political unrest in Hong Kong, coupled with mixed signals about the US-China tariff rollback dampened investors' appetite for riskier assets and was evident from a negative mood around equity markets.
Over the weekend, the US President Donald Trump said that talks with China were moving along "very nicely" but the reports on the rollback of Chinese tariffs were incorrect, which weighed on the market sentiment.
Reviving safe-haven demand dragged the cross back closer to the lower end of a multi-week-old trading range, albeit a modest pickup in the British Pound helped limit further losses, at least for the time being.
As investors looked past last week’s dovish BoE decision, the Sterling managed to attract some buying interest and seemed rather unaffected by the disappointing release of the UK GDP growth figures for the third quarter of 2019.
The UK economy recorded a growth of 0.3% during the three months to September as compared to a 0.2% contraction in the previous quarter and the yearly growth rate decelerated to 1.0% – the lowest since Q1 2010.
It will now be interesting to see if the pair is able to capitalize on the attempted bounce or remains confined in a narrow trading band amid uncertainty surrounding the outcome of the UK snap general election in December.
Technical levels to watch