GBP/JPY on hold just above 146.00 as Brexit negotiations hit a wall

• Sterling traders on the defensive in early Monday action as the EU rejects the latest Brexit proposal.
• A thin calendar for the week will have market sentiment focusing on the Brexit quagmire as well as ongoing trade tensions abroad.

The GBP/JPY saw some hesitation at the week’s open, knocking into 146.08 on the market open before recovering to 146.36 as GBP traders await further reactions from the  upcoming London market session for Monday after weekend headlines broke that the leaders of the European Union have rejected the lastest Brexit proposal to come out of the UK.

Leadership from the EU has finally weighed in on UK Prime Minister Theresa May’s latest Brexit proposal, and the “third option” exit deal appears to be dead in the water, with EU leaders in Brussels unwilling to allow the city of London to have an exemption from the EU’s autonomous right to withdraw access to financial markets and services, and PM May and Brexiteers within the UK’s parliament are back to the drawing board as pro-leavers struggle to develop a successful negotiating strategy or develop any headway with Europe.

Monday is devoid of any meaningful data on the economic calendar for either the Sterling or the Japanese Yen, and market sentiment is set to hesitate once again as Brexit fears and trade spat headlines return to the surface.

GBP/JPY levels to watch

Friday saw a much-needed hesitation after the previous week’s steady decline from an early high of 149.30, and bulls will have their work cut out for them if they decide to make a push for resistance sitting at the last two swing highs on H4 candles, near 146.65 and 147.65, while bears see support nearby at last week’s low of 145.96 and early July’s swing low of 145.18.