- Recent risk-off took its toll over the GBP/JPY amid Brexit uncertainty.
- 143.70/60 seems strong support-zone to watch during further declines.
The GBP/JPY pair trades near 145.80 ahead of the UK market open on Wednesday. The pair failed to hold yesterday’s gains on doubts over Brexit and the recent run of safe-havens. Developments at the British House of Commons and CBI realized sales would offer near-term trade direction.
Risk-on sentiment couldn’t last long as investors reassessed recent pickup in markets amid growing calls for required future rate-cuts from major central banks including the US Federal Reserve, Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ). Adding to the pessimism was sluggish industrial profits data from China.
10-year US government bond yields corrected a bit from a recent high of 2.425 to 2.416 at the press time.
On the other hand, UK lawmakers continue to prepare for a coup against the PM Theresa May, needless to mention about their public rejection of her third vote. The EU has offered the British government the time till April 12 to decide whether it wants to go ahead with PM May’s plan till May 22 or leave immediately without any deal.
The members of parliament (MPs) recently passed a motion that can help them snatch Brexit powers from the government. The MPs are likely to vote on few proposals in the same direction during late-Wednesday while PM May isn’t ready to put forward her plan for the third vote unless assure of majority support.
At the economic calendar, the UK CBI distributive realized trade survey results for the current month will be released at 11:00 GMT. Forecasts suggest 5.0% expansion over 0.0% prior.
GBP/JPY Technical Analysis
50-day and 200-day simple moving average (SMA) confluence around 144.70-60 can limit near-term declines, a break of which can recall 143.70 and 143.00 on the chart.
Alternatively, a short-term downward sloping resistance-line at 147.00 could become the buyer’s favorite while 147.70 and a broad resistance-line at 148.80 might confine further upside.
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