GBP/JPY in search of a firm direction, stuck in a range above 133.00 mark
- GBP/JPY extended its two-way/directionless trading action for the second straight session.
- Reports that the US is considering to impose tariffs on UK imports weighed on the sterling.
- An offered tone surrounding the JPY, despite the risk-off mood, helped limit the downside.
The GBP/JPY cross seesawed between tepid gains/minor losses through the mid-European session and was last seen trading in the neutral territory, around the 133.25 region.
A combination of diverging forces failed to assist the GBP/JPY cross to capitalize on this week's goodish rebound from monthly lows and led to the directionless/two-way price moves for the second consecutive session on Wednesday.
The British pound was weighed down by reports – citing the office of the US Trade Representative – that the United States is considering to impose tariffs on $3.1 billion of imports from the United Kingdom, France, Spain and Germany.
The negative factor, to a larger extent, was negated by an offered tone surrounding the Japanese yen, which struggled to gain any meaningful traction despite reviving safe-haven demand amid a turnaround in the global risk sentiment.
The ever-increasing number of new coronavirus cases globally raised the risk of renewed lockdowns to control the spread. This, in turn, overshadowed the optimism about a sharp V-shaped global economic recovery and weighed on investors' sentiment.
Investors also seemed reluctant to place any aggressive bets amid absent relevant market-moving economic releases. This further makes it prudent to wait for a sustained move in either direction before positioning for the near-term trajectory.
Technical levels to watch