GBP/JPY bulls catch a breath around 9-day high as Brexit drama continues
- GBP/JPY witnesses a pullback from the multi-day top in search of fresh clues after recent actions at the UK parliament.
- UK PM Johnson still wants to get Brexit done while Labour awaits Royal Assent.
- Japan’s foreign investment/reserve numbers and trade/political headlines will provide fresh impulse.
With the lack of details on the UK policymakers’ next move, GBP/JPY buyers struggle to hold on to recovery gains while flashing 130.23 amid Thursday’s early trading session in Asia.
The United Kingdom (UK) lawmakers showed their firm commitment to avoid no-deal Brexit while also turning down a motion to call for a snap election, portraying three-set defeat of the Prime Minister (PM) Boris Johnson.
However, the bills are heavy in number, around 100, and need a Royal Assent to become the law, which in turn raises the probability of a surprise move by the PM Johnson, as he recently said that the government has got to get Brexit done.
On the contrary, the opposition Labour party member was recently spotted, by ITV reporter Daniel Hewitt, saying that their leader Jeremy Corbyn strongly resists allowing snap elections as it holds the gate for no-deal Brexit.
It should also be noted that the US recently levied anti-dumping duties on structural steel from China and Mexico, which in turn weighs on the risk sentiment while markets await details of the US-China trade talks that were previously told to be held in September.
In addition to following trade/political headlines, investors will also keep an eye over Japan’s Foreign Reserve and Foreign Bond/Stock Investments data for intermediate moves.
Technical Analysis
The pair needs to rise beyond August 02 high of 130.72 in order to confront 50-day exponential moving average (EMA) level near 131.80, failing to which can drag the quote back to 21-day EMA level of 129.73 and then to August 28 low surrounding 128.21.