- GBP/JPY struggled to capitalize on its modest intraday gains to the 150.65 region.
- A modest USD weakness helped revive demand for the JPY and exerted pressure.
- Upbeat UK GDP print acted as a tailwind for the sterling and help deeper losses.
The GBP/JPY cross surrendered its modest intraday gains and was last seen hovering near the lower boundary of the intraday trading range, around the 150.30 region.
The cross gained some positive traction during the early part of the trading action on Thursday, albeit a combination of factors failed to assist bulls to capitalize on the move. The uptick ran out of steam near the 150.65 region amid a modest pickup in demand for the Japanese yen, bolstered by the onset of some profit-taking around the US dollar.
On the other hand, the British pound found some support from an upward revision of the UK GDP growth, showing that the economy expanded by 5.5% during the second quarter as against 4.8% estimated. However, the ongoing fuel crisis in the United Kingdom – due to the post-Brexit shortage of truck drivers – acted as a headwind for the sterling.
The combination of factors kept a lid on any further gains for the GBP/JPY cross, rather prompted some selling at higher levels, though the downside remains cushioned. The prevalent risk-on mood might continue to undermine demand for the safe-haven JPY and extend some support to the cross, warranting caution for aggressive bearish traders.
Hence, it will be prudent to wait for sustained weakness below the key 150.00 psychological mark before positioning for any further depreciating move. The GBP/JPY cross might then accelerate the slide towards intermediate support near mid-149.00s before eventually dropping to test sub-149.00 level, or monthly lows touched last week.