GBP/JPY: Trims losses, trades around 50-day MA

• GBP/JPY gapped lower in Asia on string of bad news. 
• China's coronavirus scare continues to keep risk assets under pressure. 
• US embassy in Baghdad came under missile attack over the weekend. 
• GBP/JY's bounce from session lows could be short-lived if risk-off worsens. 

GBP/JPY has bounced up from session lows and is currently flirting with the 50-day moving average at 142.46. 

Gap down open 

The pair opened the week lower at 142.43 and fell to a low of 142.05 as the futures on the S&P 500 dropped and the yen picked up an early bid on a string of risk-off news. 

While China continued to struggle to tame the coronavirus over the weekend, the US embassy in Baghdad came under attack with three missiles landing near the troops.

Further, the Trump administration expanded its trademark steel and aluminum tariffs to cover certain derivative products like imported nails, staples, electrical wires. Also, markets are worried that President Trump's trade ire may shift to Europe, given the trade tensions with China have eased with the signing of the phase one trade deal. 

The bounce seen from session lows could be reversed if the risk-off tone in the equities worsens. At press time, the futures on the S&P 500 are down 0.86%. 

Technical levels