- GBP/JPY fails to rise above the critical 148 mark.
- UK PM Theresa May wins the crucial vote to reject the amendment 19.
- UK unemployment rate stays unchanged at 4.2%.
During the American trading hours, the GBP/JPY reacted positively to the political developments from the UK and gained over 60 pips in less than an hour to refresh its daily high at 147.90 before going into a consolidation phase. As of writing, the pair is trading at 147.75, adding 50 pips, or 0.35%, on the day.
At the UK House today, the MPs won the vote to reject the amendment 19, which would give the Parliament the power take over the Brexit negotiations is the House voted against the Brexit deal in the autumn. This development helped the GBP gather strength against its rivals. However, following the initial reaction, the pair lost its bullish momentum as investors started to take some of their profits off the table.
Earlier today, the data from the UK showed that ILO unemployment rate remained steady at 4.2% to meet the market expectations. On a positive note, the claimant count change came in at -7.7K to better the market expectation of 11.3K.
There will be a series of votes on more amendments on Thursday as well. However, the market is unlikely to pay attention to the outcome. More importantly, CPI data from the UK will be followed closely by investors. Markets expect the annual core-CPI to stay unchanged at 2.1% in May and a higher-than-expected reading is likely to weigh on the GBP as it would force the BoE to not to make any changes to its monetary policy.
Technical levels to consider
With a daily close above 148/148.10 (psychological level/Jun. 7 high) area, the pair could extend its gains toward 149.20 (May 9 high) and 150 (psychological level/May 18 high). On the downside, supports could be seen at 146.70 (Jun. 11 low), 146 (psychological level/Jun. 8 low) and 145.30 (May 25 low).
Share
