GBP/JPY: Comments from Fed’s Powell fall short of overcoming Brexit challenges
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GBP/JPY: Comments from Fed’s Powell fall short of overcoming Brexit challenges

  • GBP/JPY dropped to 143.80 during early Monday.
  • Pessimism surrounding Brexit continued weighing on the prices.
  • 143.70 and 143.50 seem nearby supports with 200-day SMA level of 144.70 acting as adjacent resistance.

The GBP/JPY pair trimmed 60 pips since day’s start to 143.80 while writing on early Monday. The British Pound (GBP) continued struggling across the board as the latest news from the Brexit favored risk-off moves. Comments from the Fed Chair Jerome Powell could do little to improve sentiments. Japan’s preliminary machine tool orders and developments concerning Brexit will entertain GBP/JPY traders looking forward.

In spite of struggling for over two years and being near to the official separation date, the EU and the UK aren’t done with Brexit deal. Latest news suggests the British leaders dropped the region’s recent proposals during weekend whereas the UK Telegraph came up with an update indicating the EU’s readiness to levy extra charges amounting to multi-billion Pounds on the UK if they chose to remain in the region beyond March 29 deadline.

The Pound traders were initially positive on the hope of delayed Brexit as the UK parliament will be voting on the PM Theresa May’s new proposal on March 12. However, recent developments surrounding the challenges to PM May’s position by opposition and disagreements with EU weigh on the British currency.

On the other hand, latest comments from the Fed Chair at the CBS interview fall short of renewing risk sentiment. The Fed Chair repeated his latest comments that the economy is in good shape and rates are ‘appropriate’ considering muted inflation during the 60-minute interview.

Looking forward, traders may concentrate on Japan’s preliminary machine tool orders for February month. The orders dropped -18.8% YoY during January. Following that, the UK market open and Brexit developments could continue directing near-term market moves.

GBP/JPY Technical Analysis

Not only an upward sloping support-line connecting January 04 low to February low, at 143.70, 100-day simple moving average (SMA) at 143.50 can also challenge the sellers ahead of offering 50-day SMA level of 142.60 as a support.

On the upside, 200-day SMA level of 144.70 and 146.00 are likely nearby resistances to watch.

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