• GBP/JPY pares daily gains but stays on the way to first positive week in four.
  • Market sentiment worsens amid indecision over Ukraine, jump in China’s covid cases.
  • Japan’s Overall Household Spending rallied in January but Nikkei 225 consolidates the biggest daily jump since June 2020.
  • UK’s monthly data dump can entertain traders but Ukraine headlines are more important.

GBP/JPY steps back from intraday high amid fresh challenges to risk but stays mildly bid around 152.00 during Friday’s Asian session.

The cross-currency pair’s latest weakness could be linked to the covid update from China, as well as confusion over the Ukraine-Russia crisis amid recently mixed updates. Also weighing the quote could be the pair traders’ caution ahead of the UK’s monthly data dump.

Early Friday morning, China reported the first above 1,000 fresh covid cases in over two years. The dragon nation was the first to ring the alarm of coronavirus pandemic and hence the fresh jump in COVID-19 infections isn’t a good sign for the markets.

On a different page, reports of a Russian military attack on Kharkiv institute that contains an experimental nuclear reactor initially challenged the market’s mood before the news of no negatives tamed fears. In the same way, chatters swirled that Moscow’s forces are gradually dispersing and may be retreating also favored the optimists before the US Satellite company Maxar’s update suggesting more troops being redeployed.

Amid these plays, S&P 500 Futures renew intraday low, down 0.40% on a day while the US 10-year Treasury yields drop 4.4 basis points (bps) to 1.965% by the press time. It’s worth noting that Japan’s Nikkei 225 declines over 2.0% at the latest, following the biggest daily jump in 21 months marked the previous day.

Moving on, the market’s fears may weigh on the GBP/JPY prices and hence highlight the risk catalysts for fresh impulse. However, the UK’s monthly prints of GDP, Manufacturing Production and Industrial Production for February will also be important amid rising concerns over the Bank of England’s (BOE) faster rate-hike trajectory. That said, the majority of the scheduled figures are likely to print firmer prints and can help the pair to battle the bears.

Technical analysis

Failures to cross January’s low near 152.90, not to forget the 10-DMA level of 152.75, keep GBP/JPY bears hopeful.

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


Please enter your comment!
Please enter your name here