GBP/JPY struggling to recover from five-week lows on renewed Brexit stress

• Brexit continues to mire the GBP as UK government proceedings get messy.
• A bad read for Australia’s GDP leaves the rest of the Pacific-Asia theater on the back foot.

GBP/JPY is trading near the 143.50 region after a volatile Tuesday saw the pair peak at familiar levels near 144.80 before getting sent back down to a five-week low near 142.70 as Brexit headlines continue to drag on the Pound.

Early Tuesday saw the European Central Justice release a statement reminding markets that the UK is free to withdraw Article 50 at anytime, a move that would effectively cancel Brexit in its entirety, and the announcement briefly sparked yet another relief rally in the GBP, but risk sentiment was immediately doused with cold water after UK Prime Minister Theresa May’s spokesman  stated in no unspecific terms that the UK will not be canceling their Brexit plans. Investor confidence further soured after the UK’s parliament voted to hold its own government in contempt, a first for the United Kingdom, claiming that PM MAy are her Brexit team were in contempt of UK rule of law by withholding critical legal analysis of the current Brexit Withdrawal Agreement, ordering PM May by parliamentary decree to disclose the findings of any legal oversight regarding Brexit.

Risk appetite is further souring in the Pacific-Asia session after Australian GDP figures broadly missed expectations, coming in at just 0.3% q/q versus the previous reading of 0.9%, and markets are heading into the bulk of Wednesday’s market sessions already facing retreating market flows as risk assets take another beating in the early Asia market window.

GBP/JPY Technical Levels