GBP/JPY drops to 2-week low as risk off rules ahead of UK lawmakers’ return to parliament

• Risk tone remains heavy as the UK lawmakers to return parliaments after a long break.
• The fears of multiple Brexit options to be discussed and might be voted dragged the GBP/JPY pair downward.

The GBP/JPY pair slid to the lowest levels since April 10 during the early Asian trading on Tuesday. While Easter recess in the UK parliament confined the pair moves off-late, risk-off shook the quote as investors remained cautious ahead of the British members of the parliaments (MPs) return to their desks.

Speculations that the UK PM will face another no-confidence motion dragged the British Pound (GBP) on Monday but the losses were confined by the news that the PM May will restart cross-party talks to break the Brexit deadlock and safeguard her position.

Though, investors fear volatile trading sessions when the UK lawmakers return to the parliament after a long break ranging from April 11. News reports signaling that many Brexit options are to be discussed in the British parliament have been challenging the investor sentiment recently.

10-year treasury yield of the US government trimmed one basis point to 2.58% at the initial hours after Tokyo open.

In addition to the Brexit developments, the key risk events like the US pressure on Iranian oil exports and the US-China trade deal will also be observed closely.

GBP/JPY Technical Analysis

During the pair’s extended downturn, 200-day simple moving average (SMA) near 144.60, followed by 100-day SMA level of 143.60, may entertain sellers.

On the contrary, 50-day SMA level of 145.75, current month highs near 147.00 and 147.20 are likely short-term upside caps for prices ahead of highlighting 147.40 and 148.30 numbers to the north.