• GBP/JPY reverses from monthly high, stays offered near intraday low.
  • Market sentiment dwindles amid light calendar, holiday mood.
  • Brexit woes, fears of rising Omicron cases and Sino-American tussles test previous risk-on mood.

GBP/JPY snaps three-day uptrend, down 0.17% intraday around 153.20 during early Friday morning in Europe. The cross-currency pair refreshed the monthly high the previous day before taking a U-turn from 153.70.

The pair’s latest weakness could be linked to the market’s consolidation during the Christmas holidays in the West. Adding to the bearish bias are the recent doubts over Merck’s Covid-19 pill, which got US Food and Drug Administration’s (FDA) approval on Thursday.

On the same line were headlines concerning the all-time high covid cases in the UK, as well as rising infections in Europe.

Additionally, chatters over French readiness to fight a legal battle over fishing licenses with the UK join firmer US Treasury yields to weigh on the GBP/JPY prices. Not only the firmer yields but the mixed performance of Asia-Pacific stocks also weighs on the pair.

Even so, recent studies showing the fewer odds of hospitalization due to the South African covid variant, dubbed as Omicron, keep the risk-aversion at a limited distance.

That being said, GBP/JPY traders should keep a track of the risk catalysts amid a light calendar and Christmas Eve holiday in the West for fresh impulse.

Technical analysis

GBP/JPY remains bullish until providing a daily closing below the 200-DMA level of 152.50. That said, a downside break of 50-DMA level near 153.20 may extend short-term pullback.

This article was originally published by Fxstreet.com.Read the original article here.

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