GBP/JPY Price Tumbles to 8-Week Lows Around 150.5 as Risk-off Prevails

• Fresh selling pushed the GBP/JPY down on Tuesday to its lowest level since October 4.
• The risk-off impulse supported the safe-haven JPY and exerted heavy pressure on the cross.
• The weaker USD helped limit GBP losses; Brexit woes continue to favor bearish traders.

Last traded in the range of 150.65, down 0.25%, the GBP/JPY price has cut some of its intraday losses to its lowest level since October 4.

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In spite of its modest intraday gains, the cross found a new offer at 151.60-65 amid new buying around the safe Japanese yen. New vaccine-resistant variations of the Coronavirus have investors concerned about the potential economic impact of the disease. The market sell-off in the equity markets, in turn, triggered a renewed wave of global risk aversion.

In addition to already weak market sentiment, Moderna CEO Stefan Bansel predicted that existing vaccines against Omicron would be far less effective than previous Covid-19 strains. As a result, the GBP/JPY cross fell to an intraday low of 150.42 due to this increase in demand for safe-haven. Further losses were contained, however, by a modest rise in demand for pound sterling.

A strong tone surrounding the US dollar has supported the pound sterling, which has been hurt by a sharp decline in US Treasury bond yields. In addition, the pound sterling has been hurt by the debate over the Northern Ireland Protocol between the UK and Great Britain and the escalation of disputes over fishing rights between France and Great Britain following Brexit. In turn, this prevented the GBP/JPY cross from rebounding significantly.

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However, the pair’s failure to gain momentum favors bearish traders and supports prospects for a further decline from the five-year high hit in October. Therefore, any retracement above the 151.00 mark may present a selling opportunity and fail fairly quickly. As long as the Coronavirus saga continues unabated, the GBP/JPY cross remains subject to market events.

GBP/JPY price technical analysis: Weak buyers attracting more selling

The GBP/JPY price failed to impress the buyers as the up bar with above-average volume is off the highs and may close below the midpoint. The previous down bar is widespread with low volume, which indicates that the cross lacks any directional bias at the moment. However, the path of least resistance lies on the downside. The sellers may attempt to target the 150.00 level and to break below it towards 149.50.