Is GBP/JPY the new risk barometer?

• GBP ranks last on the list of safe havens.
• GBP/JPY mimics action in the stock markets.

The British Pound ranks last on the list of safe havens, given the UK's twin deficits, Brexit uncertainty, and domestic political instability.

Meanwhile, the Japanese Yen remains one of the most favored currencies in times of stress. Hence, the GBP/JPY cross looks like a new risk barometer. This week's price action adds credence to the argument.

The cross fell more than 300 pips to 152.20 on Monday, tracking the 1000 point slide in US equities. The pair extended the decline further to 151.20 in the Asian session yesterday before regaining some poise. The pair rose to a high of 153.13 earlier today as US equities strengthened more than 2 percent.

As of writing, the cross is trading largely unchanged on the day at 152.80. The retreat from 153.13 to 152.80 could be associated with 0.30 percent drop in the S&P 500 futures.

GBP/JPY Technical Levels

A break above 153.27 (38.2% Fib R of Feb. 2 high - Feb. 6 low) would expose 153.87 (5-day MA) and 154.00 (10-day MA). On the other hand, a move below 152.43 (50-day MA) could see the pair re-test 151.97 (Jan. 30 low) and 151.21 (previous day's high).