GBP/JPY consolidates below YTD tops, around 140.00 mark
- GBP/JPY seesawed between tepid gains/minor losses through the early European session.
- A softer risk tone extended some support to the safe-haven JPY and capped the upside.
- The BoE Governor Andrew Bailey's speech on Friday might provide a fresh directional impetus.
The GBP/JPY cross quickly retreated around 25 pips from daily tops and was last seen trading in the neutral territory, around the key 140.00 psychological mark.
The cross has been oscillating in a narrow band over the past two trading session and consolidated this week's strong positive move of around 200 pips to fresh YTD tops. The range-bound trading action could be attributed to some cautiousness ahead of the highly-anticipated Jackson Hole Symposium.
The British pound seemed rather unaffected by renewed concerns over the lack of progress in Brexit talks. However, a softer risk tone extended some support to the Japanese yen's safe-haven status and kept a lid on any runaway rally for the GBP/JPY cross amid absent relevant economic releases.
The latest escalation between the world's two largest economies, over actions in the disputed South China Sea, took its toll on the global risk sentiment. It is worth recalling that the US imposed visa restrictions on certain Chinese individuals. 24 companies were also added to the entity list for helping to build military islands in the area.
The market focus now shifts to BoE Governor Andrew Bailey's remarks on Friday, which will play a key role in influencing the near-term GBP price dynamics. This, along with the market risk sentiment will assist traders to determine the next leg of a directional move for the GBP/JPY cross.
In the meantime, the Fed Chair Jerome Powell's speech later this Thursday might infuse some volatility in the global financial markets and produce some short-term trading opportunities.
Technical levels to watch