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  • GBP/JPY repeats the failure to probe 140.00, retreats from 139.58.
  • Fears that the UK is moving fast towards reopening the economies weigh on the Cable.
  • US-China tussle returning on the table on the issue concerning American lobsters.
  • Friday’s US/Canada employment data, receding protests in the US favored earlier risk-on sentiment.

GBP/JPY drops to 139.00, still up 0.14% on a day, while stepping back from February-end top during Monday’s Asian session. The pair earlier cheered broad risk-on sentiment to probe the multi-day high but the recent risk reset seems to have probed the bulls.

In addition to the fears that the UK is moving too fast to unlock the nation, British PM Boris Johnson’s move to safeguard the domestic companies from Chinese takeovers also speaks louder of the fears at the Tory-run nation. Additionally, another round of failed Brexit talks has added worries of the British Pound trader.

Elsewhere, China’s Global Times poured cold water on hopes of any trade concession on American lobster exports which US President Donald Trump pushed during the weekend. The Republican leader also threatened to take punitive measures if China and the European Union (EU) fail to help.

On Friday, the market’s trading sentiment rallied after the US and Canada flashed surprisingly positive data that give rise to hopes of a quick recovery from the coronavirus (COVID-19) led economic shock. Also supporting the risk-on mood could be receding protests in the US and weekend updates showing record trade surplus from China.

On the data front, Japan’s first quarter (Q1) 2020 GDP recovered from the -0.90% initial forecasts to -0.6% whereas Trade Balance figures for April slumped to
¥-966.5 B from ¥103.1 B prior.

Given this background, the US 10-year Treasury yields catch a breather near 0.90% whereas Japan’s NIKKEI also trims the early-day gains to 23,065.

Considering the lack of major data, traders may keep eyes on the virus updates from the UK, as well as major risk catalysts, for near-term direction.

Technical analysis

A sustained break of 140.00 becomes necessary for the bulls to aim for the early-February month low near 140.93, failing to do so can drag the quote back to a 200-day SMA level near 137.50.