GBP/JPY slides to multi-day lows, below 143.00 handle
- GBP/JPY extends Friday’s UK data-led retracement slide from one-month tops.
- No-deal Brexit fears, BoE rate cut speculations continue to weigh on the GBP.
The GBP/JPY cross edged lower for the second consecutive session on Monday, with bears looking to extend the downfall further below the 143.00 round-figure mark.
The cross opened with a modest bearish gap on the first day of a new trading week and added to the previous session's sharp pullback from one-month tops, triggered by dismal UK monthly retail sales figures.
Pound weighed down by a combination of factors
The incoming UK economic data continues to strengthen the case for a 25bps rate cut by the Bank of England at its upcoming monetary policy meeting on 30 January and weighed heavily on the British pound.
The sterling was further weighed down by concerns that Britain will crash out of the European Union at the end of this year, which coupled with reviving safe-haven demand added to the selling bias on Monday.
A slightly cautious mood around the global equity markets – amid tensions in the Middle East and Libya – was seen as one of the key factors underpinning the perceived safe-haven demand for the Japanese yen.
With Monday's slide, the cross has now reversed a major part of last week's positive move. Some follow-through selling might be seen as a key trigger for bearish traders and pave the way for an extension of the ongoing corrective slide.
Technical levels to watch