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  • GBP/JPY down 0.85% over the week, heads for lowest weekly close in 16 months.  
  • Risk aversion supports JPY while Brexit concerns weighs on GBP.

The GBP/JPY pair is falling 50 pips on Friday, but remain above weekly lows. Since the beginning of the US session it is moving between 140.25 and 140.75, on its way to the lowest weekly close since April 2017 and the fifth consecutive slide.  

Uncertainties about the Brexit outcome continues to weight on GBP that among majors, is the worst performer of the week. On the contrary, the yen remains strong amid risk aversion. Trade war tensions and emerging markets jitters boosted the demand for the Japanese currency that climbed across the board over the last five days. The rally of the yen eased after Wednesday and then pulled back moderately.  

GBP/JPY bottomed two days ago at 139.88, the weakest intraday levels since June 2017. From the lows bounced to the upside but the recovery was halted at 141.30, and today retreated below 141.00.  

Technical outlook  

The main trend and risks point to the downside. The area around 140.00 is the key support, below the next strong level is seen at 138.60/70. On the flip side, the pound needs to consolidate on top of 141.50 to remove short-term pressures. Above, the next resistance is seen at 142.10.