GBP/JPY: Sellers lurk around multi-month high, reprints 145.40 on profit-booking

• GBP/JPY trades near 145.40 while heading towards Europe open on Tuesday.
• The pair returned to the day’s low from the highest levels since mid-November.
• Key risk-events from the UK and the US could determine near-term pair moves.

The GBP/JPY flirts with the intra-day low of 145.40 during early Tuesday. The pair surged to the highest levels since mid-November on optimism surrounding delayed Brexit but couldn’t hold those gains for long as sellers booked profit ahead of important events from the UK.

Not only opposition Labour party leader Jeremy Corbyn’s turn towards supporting a “no-deal” Brexit, but The Sun’s report that the UK PM Theresa May will formally propose to put a no-deal Brexit off-the-table and favor delayed exit from the EU in today’s parliament appearance also pleased the British Pound (GBP) lovers. The news fuelled GBP/JPY to the highest levels since November 15, 146.00, earlier during the day.

However, sellers lurk around the highs as upcoming key risk events pushed them toward profit-booking and print the intra-day low of 145.40.

In addition to the upcoming meet between the US President Donald Trump and his Chinese counterpart Xi Jinping sometime during early March, there are many important events that grab investor’s immediate attention.

Among them, the Bank of England (BoE) policymakers’ quarterly inflation report hearings and the UK PM May’s parliament appearance will precede the Federal Reserve Chair Jerome Powell’s semi-annual testimony.

The BoE Governor Mark Carney and co. are less likely to deviate from their latest statements conveying a high risk of no-deal Brexit while praising the domestic economic developments. Moving on, PM May could put forward her progress report on EU visit and propose the cessation to “no deal” Brexit. She might also avail the opportunity to put forward glimpse of her fresh Brexit proposal to be voted soon.

The Fed Chair will appear before the Senate Banking Committee during his first-day of testimony out of the two-day affair. Considering the recent pattern of the Fed policymakers, Powell isn’t expected to relinquish his control over “patience” calls. Though, chances of him praising economic data-points and employment scenario can’t be denied.

While the return of risk aversion before the key events triggered the pair’s profit-booking, positive results could again fuel the pair towards day’s high or even further.

GBP/JPY Technical Analysis

GBP/JPY requires a successful break above 146.00 in order to aim for 146.90 and 147.50.

Alternatively, an upward sloping trend-line connecting lows marked since mid-February, at 144.60, becomes important as it holds the gate for the pair’s decline to 144.15 and 143.75.