- Pound manages to stabilize after sell-off from Brexit headlines.
- Yen remains strong support by risk aversion.
The GBP/JPY pair lost the 131.25 support level hours ago and tumbled. It bottomed at 130.40, the lowest in a month. During the American session rebounded but it was unable so far to hold on top of 131.00. As of writing, trades at 130.90, down 85 pips for the day.
Down on Brexit and the Yen
The Pound fell across the board during the European session following Brexit headlines. Signals that a deal is close to being impossible weight on the Sterling. At the same time, UK Prime Minister Johnson’s cabinet continues with the preparations for a no-deal Brexit. Donald Tusk, President of the European Council, accused Johnson of playing a “stupid blame game”.
The Yen was about to end the day higher supported by the deterioration in risk sentiment. The Japanese currency lost momentum over the last hours amid a recovery in Wall Street. Still, the DOW JONES was losing 0.45% and the NASDAQ 0.75%. Also US yields moved off lows boosting USD/JPY to the upside.
Market participants await news headlines regarding US-China trade talks. Tomorrow the Federal Reserve will released the minutes from the latest FOMC meeting.
GBP/JPY breaks range
The pair broke the key 131.20/30 support barrier and resume the bearish move. The short-trend continues to point to the downside. Now the 131.30 area is a key resistance followed by 131.75. The downside bias is likely to remain intact as long as price holds below 132.30/40. The immediate support might be seen at 130.50 followed by the 130.00 area and then 129.55.
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