- GBP/JPY struggles to keep the previous day’s recovery moves.
- Biden didn’t alarm over NI, EU-UK agreed over fishing catch but the Brexit uncertainty extends.
- Growing doubts over British unlock, push for covid origins and US infrastructure spending deal restrict latest moves.
- Brussels-Britain haggling, Japan covid and UK data-dump are crucial for fresh impulse.
GBP/JPY seesaws near 155.00, after mildly bid day, amid Friday’s Asian session trading. The pair recently cheered the market’s upbeat sentiment over Brexit and weaker Treasury yields. However, concerns over the UK’s unlock and cautious mood ahead of a busy day probes the cross-currency pair buyers.
UK PM Boris Johnson terms US President Joe Biden as “a big breath of fresh air” after long talks over Brexit. The US leader was initially feared to take a tough stand over the British readiness to repeal the Good Friday agreement relating to Northern Ireland (NI). Following the meeting, Downing Street mentioned, per Reuters that he (Johnson) and Biden agreed that both Britain and the EU had a responsibility to work together and to find pragmatic solutions to allow unencumbered trade” between Northern Ireland, Britain and Ireland.
It’s worth mentioning that the EU-UK agreement over fishing catches in the British waters also flashed Brexit-positive signals. Though, the ex-neighbors are yet to agree over the NI issues and may spark woes in today’s Group of Seven (G7) meeting as they collide on the same platform.
In addition to the Brexit issue, the US and the UK-led push to re-open the detailed investigation of the covid origin and feared anti-China moves also highlight today’s G7. Additionally, England and Washington’s pledge for the coronavirus (COVID-19) vaccine donations adds to today’s G7 meeting’s importance.
Also on the sentiment-positive side was the latest news that US bipartisan Senators agreed over a $1.7 trillion infrastructure spending plan.
Alternatively, Japan’s readiness to offer more stimulus and no major positives relating to the virus resurgence join chatters over Japanese PM Yoshihide Suga’s call of a snap election to weigh on the risk appetite.
Amid these plays, S&P 500 Futures remain indecisive after US CPI drowned Treasury yields and helped the Wall Street benchmarks the previous day.
Looking forward, updates from the G7, covid news and Brexit headlines could offer qualitative directions to GBP/JPY prices whereas the UK’s data-dump for April, likely to offer soft figures, will provide fresh impetus to the pair moves.
Technical analysis
Although 21-day SMA restricts short-term downside around 154.80, bulls await a clear upside break of a descending trend line from May 28, near 155.45, for fresh entry.
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