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  • GBP/JPY maintains its breakdown of 50-day EMA.
  • UK PM Johnson’s likely proposal keeps no-deal Brexit risk on the cards.
  • Fears of macroeconomic weakness unearthed amid a lack of major data/events.

Following its declines below 50-day EMA for the first-time since early-September on Tuesday, the GBP/JPY pair stays under the key technical indicator while nearing 132.50 amid the initial Asian session on Wednesday.

Not only the UK Prime Minister (PM) Boris Johnson’s firm stand for Brexit date of October 31, rejection of his likely Brexit proposal, as conveyed by the UK Telegraph, from some of the European and Irish diplomats also keep the no-deal Brexit fears alive.

Adding to the pair’s weakness is renewed fears of the global recession amid downbeat activity numbers from the key economies.

Further, recent news of North Korea’s missile test, as confirmed by the US and Japanese officials, adds to the safe-haven demand.

Although China’s absence and a lack of major data, except Japanese Consumer Confidence numbers, restrict the market’s reaction to the recent news/headlines, overall pessimism prevails. With this, the US 10-year treasury yields remain under pressure around 1.63% while the US equities recently registered declines.

Moving on, the United Kingdom’s (UK) PM Johnson’s closing speech at the Conservatives’ annual conference, followed by the Brexit proposal to the EU, will be in the spotlight amid a light economic calendar.

Technical Analysis

50-day exponential moving average (EMA) level around 132.70 seems to be immediate resistance ahead of 133.35/37 area including Tuesday’s high and September 23 low. Meanwhile, a clear break below 132.00 highlights late-August top surrounding 130.70.