- GBP/JPY cheers passage of UK PM’s Brexit bill.
- Doubts over futures trade relations and political concerns surrounding the US, China and the Middle East challenge the market’s risk tone.
- Japan’s activity data can entertain pair traders, trade/Brexit headlines to keep the driver’s seat.
While passage of the UK PM’s Brexit Bill initially pleased GBP/JPY pair traders, political tension concerning the US-China and US-North Korea, not to forget the Middle East, exert downside pressure on the pair. Even so, the quote stays firm around 142.40 amid Monday’s Asian session.
The UK PM Boris Johnson’s EU (Withdrawal Agreement) Bill got 358 to 234 numbers while standing for a vote on Friday. With this, the Tory leader pushed the UK one step closer to the Brexit. The bill blocks any transition period beyond 2020 while likely turning the October month Brexit negotiations into the law by the end of January 2020.
Given the Conservatives’ clear majority, chances of the Brexit legislation to get support from the Parliaments and a smooth running of the process seem to please the British Pound (GBP) buyers. However, the European Union (EU) is skeptical about the British leaders’ deadline.
Also challenging the sentiment is the US President Donald Trump’s warning to the UK leaders that Brexit trade deal negotiations between the UK and Washington must not include any reference to climate change, leaked documents have revealed, as per the BBC.
Elsewhere, the US President’s upbeat comments for phase-one fail to get a positive response from China as Beijing hates the US interference in internal matters. Further, a tweet from the Iranian journalist that Israel planned to bomb Iran during the protests also weighs on the market’s risk sentiment.
With this, the US 10-year treasury yields struggle to extend Friday’s gains, while seesawing around 1.915%, whereas S&P 500 Futures stay mildly bid near 3,228.
Moving on, Japan’s October month All Industry Activity Index will be the key to watch for immediate direction. It’s worth mentioning that the holiday-shortened week will limit the market’s activity. Though, trade/Brexit headlines will be in the spotlight.
Technical Analysis
Prices need to clear the 21-day Simple Moving Average (SMA) level of 142.74 to avoid the risk of declining to a 50-day SMA level of 141.20.
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