GBP/JPY: Bears cheer no-deal Brexit concerns amid trade/political pessimism

• Tories flash mixed signals surrounding the UK PM’s ability to crash out of the EU without any deal.
• Boris Johnson and the team continue to prepare for a no-deal Brexit.
• Trade/political pessimism also weigh on the GBP/JPY pair’s trading sentiment.

With the UK Prime Minister (PM) Boris Johnson and company aggregating efforts towards a no-deal Brexit, coupled with global trade/political pessimism, the GBP/JPY pair seesaws near the multi-month low around 129.32 during early Monday.

Even if some of the senior Tory rebels like Dominic Grieve remains optimistic of the UK’s Parliament’s capacity to stop no-deal Brexit, majority of the British diplomats, including one of Johnson’s top adviser Dominic Cummings, holds the view that nothing can stop PM Johnson to crash out of the EU, if its needed, as the parliament will be in short of sessions after the summer recess and before October 31 deadline.

Recently, the Brexit Secretary Stephen Barclay asked the EU to allow their side of negotiator Michel Barnier to help find “common ground” with the UK, as per the BBC.

On the other hand, the US-China trade relations again worsened after the US President Donald Trump levied fresh tariffs on China effective from September 01. Further, the tension in the Persian Gulf persists after Iran seized third oil tanker in a month.

While trade/political headlines will keep entertaining investors, markets will keep an eye over the Services Purchasing Managers’ Index (PMI) data from Japan and the UK for fresh impulse.

Technical Analysis

Unless clearing 130.50 resistance, which holds the key to 131.60 and 132.00 resistance, prices are less likely to avoid witnessing 2017 low surrounding 125.62.