GBP/JPY inches towards the 23 December low of 141.17
The pair is finding some added support from the level above as well as the 38.2 retracement level @ 141.26 currently. The low today reached 141.19 as the pound continues to give back its late December gains as the yen also strengthens on risk aversion.
It's a bit of a double-whammy and that has seen the pair ease by over 1% in trading today.
A break below the support levels highlighted above will open up further downside momentum for sellers towards the 140.00 level potentially. There is a bit of a swing region between 139.00 to 141.00 - as seen in the consolidation period from mid-October to November.
A further break beyond that will see sellers try to challenge the key daily moving averages.
Looking ahead, there is still much to consider as the pound will have to navigate through some Brexit hurdles ahead of the 31 January deadline. However, that should not prove to be a problem given Boris Johnson's overwhelming majority in parliament.
As such, the pound may look towards economic data and positioning for more directional moves. The retracement in the last two days is but an example of the latter.
Meanwhile, for the yen, continue to keep abreast of risk sentiment but if anything else, I reckon the tensions we're seeing here is one that markets may not shake off that easily. In turn, that could keep risk trades more cautious even during the next week.
