- GBP/JPY refrains to carry bounce off 200-day SMA.
- Doubts over Brexit, mixed sentiment concerning the US-China trade deal in the spotlight.
Although 200-day SMA confined the GBP/JPY pair’s immediate declines on Thursday, the quote remains under pressure while trading around 139.50 during Friday’s Asian session.
Investors waiting for the European Union’s (EU) word for the Brexit extension, got another catalyst to worry, which was mostly anticipated in the form of the United Kingdom’s (UK) Prime Minister’s (PM) announcement of a snap election. The motion for an early election on December 12 will be voted on Monday.
Even if most British politicians are likely to support the motion, the UK PM wants them to back his Brexit deal before the parliament resolves during November. The same might create problems and set another drama within more than three-year-old Brexit series.
Elsewhere, the US-China trade sentiment also got questioned after the United States’ (US) Vice President criticized China’s Human Rights record and extended support for Hong Kong activists.
As a result, the risk-tone pulls back from the previous recovery with the Wall Street ended on a mixed note while the US 10-year Treasury yields cling to 1.75% by the press time.
With no major data on the card, investors will continue following trade/Brexit headlines for fresh impulse.
Technical Analysis
A downside break below 200-day Simple Moving Average (SMA) level of 138.73 could recall June month high of 138.33 while July top near 137.80 can question sellers then after. Alternatively, an upside clearance of late-May high of 141.75 seems necessary for buyers to target April lows nearing 143.80.
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