- GBP/JPY dips as US stock futures turn red on SIno-US tensions.
- President Trump signs an executive order to ban Chinese apps.
GBP/JPY is feeling the pull of gravity with the anti-risk Japanese yen drawing bids on President Trump’s order to ban Chinese apps, a move that could elicit retaliatory responses from Beijing.
The pair is trading near the ascending 5-day simple moving average support at 138.50, representing a 0.13% decline on the day, having put in a high of 138.75 early Friday.
President Trump issued an executive order a few minutes ago, banning any US transactions with the Chinese company ByteDance, which owns the video-sharing app TikTok and WeChat app, starting in 45 days. “The US must take aggressive action against the owners of TikTok to protect our national security,” Trump said in one order.
The US stock futures have responded negatively to the latest developments in the Sino-US tussle, pushing the yen crosses lower. At press time, the futures on the S&P 500 are down 0.40%. Clearly, markets are worried about a flareup in the US-China tussle.
Additional bearish pressure may be stemming from the political deadlock in Washington over the additional coronavirus stimulus package.
And while the Bank of England offered a surprisingly upbeat assessment for Britain’s economy on Thursday, analysts and investors are not buying it and expect risks to mount in the near term, according to a report by Bloomberg.
From a technical analysis perspective,139.00 is the level to beat for the bulls. That’s because the pair has faced rejection above that level multiple times since last Friday.