- GBP/JPY trades near 145.50 during initial Asian trading session on Wednesday.
- Brexit pessimism weighs on the quote with further developments concerning no-deal and exit date awaited.
- 148.30 seems important resistance while 144.00 may act as crucial downside support.
The British Pound (GBP) remains little changed to 145.50 against the Japanese Yen (JPY) on early Wednesday. The GBP/JPY pair seesawed during Tuesday as Theresa May’s second Brexit proposal got rejected in the UK parliament voting despite initial positive developments. While pessimism surrounding the British exit continues to weigh on buyers, upcoming voting on no-deal Brexit and extension of departure date could direct near-term trade sentiment.
Theresa May had to witness another humiliation in the UK parliament even after putting hard efforts for Brexit as her second proposal also got rejected by the members of parliament (MPs) with a clear difference of 149 votes between the supporters and the opponents.
GBP/JPY trimmed early-day gains and marked fresh low around 144.60 after the voting results on Tuesday. However, pullback took place after PM May’s confirmed that there will be a vote on Wednesday on a no-deal, failure of which can give rise to another voting session on Thursday on extending Article 50 date. Though, sellers remained in command as the President of the European Council Donald Tusk said afterward that EU will consider any request to delay the deadline if a “credible justification” is presented.
During early Wednesday, risk sentiment remained in favor of the Japanese Yen (JPY) in spite of weaker than expected -2.3% and -1.7% prints of Japan’s January month machinery orders to -2.9% and -5.4% on MoM and yearly basis respectively.
Looking forward, traders may now observe how far Theresa May continues to bear with Brexit proceedings considering opposition Labour party’s repeated attempts to topple her seat and the EU lawmakers’ dislike for British politics.
GBP/JPY Technical Analysis
GBP/JPY needs to clear six-month-old descending trend-line, at 148.30, in order to please bulls with 149.40 and 150.00 resistances.
Meanwhile, 200-day simple moving average (SMA) near 144.60, adjacent to an upward sloping support-line stretched since January 04, at 144.00, can continue to remain in sellers’ radar.
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