GBP/JPY rebounds from monthly lows, finds decent support near 132.00 mark
- GBP/JPY witnessed some intense selling for the fourth straight session on Friday.
- The heavily offered tone surrounding the sterling was seen weighing on the cross.
- The upbeat market mood undermined the safe-haven JPY and helped limit losses.
The GBP/JPY cross lost some additional ground on Friday and dropped to fresh monthly lows, albeit managed to find decent support ahead of the 132.00 mark.
The cross prolonged this week's bearish trajectory and remained under some intense selling pressure for the fourth consecutive session on Friday. The downfall was sponsored by the heavily offered tone surrounding the British pound that followed the Bank of England (BoE) policy decision on Thursday.
As was widely expected, the BoE left the benchmark interest rate unchanged at 0.10% and increased the size of its bond-buying program by £100 billion. The BoE also hinted towards further quantitative easing measures to combat the economic impact of COVID-19, which took its toll on the sterling.
On the other hand, the safe-haven Japanese yen benefitted from concerns about a surge in new coronavirus cases and geopolitical tensions in Asia. However, the prevalent upbeat market mood failed to provide any additional boost to the JPY and helped limit the downside for the GBP/JPY cross.
The intraday bearish pressure eased just a few pips ahead of the 132.00 mark and helped the cross to quickly rebound around 50 pips from daily lows. Nevertheless, the GBP/JPY cross remains on track to post the second consecutive week of losses despite receding fears of a no-deal Brexit.
Technical levels to watch