GBP/JPY has been sent lower with supply in the pound around Brexit angst and key Brexit Ministers resigning following PM May’s force-feeding of a soft Brexit policy to her Cabinet on Friday at Chequers.
The senior government resignations are as follows: Brexit Minister Davis, (a “hard Brexiteer” who is replaced by a “soft Brexiteer” Raab), and his No 2 at the Department for Exiting the EU, Steve Baker. And finally, Boris Johnson who has resigned as foreign secretary, becoming the third minister in 24 hours to walk out of the government rather than back Theresa May’s plans for a soft Brexit. As the flamboyant public face of the Vote Leave campaign, Johnson’s departure will deepen the sense of crisis around May.
48 MPs could write letters of no confidence to the chair of the backbench 1922 Committee
If 48 MPs write letters of no confidence to the chair of the backbench 1922 Committee, Graham Brady, May will face a vote of no confidence. However, anti-EU MPs seem to be conceding that PM May’s position is secure for now but it remains to be seen whether government policy flies with the UK’s EU partners.
In the meantime, the pound has lost its bid that it had enjoyed early after better UK data had solidified August BoE rate hike expectations. Instead, cable has dropped from 1.3363, EUR/GBP has rallied from 0.8813 to 0.8874 and GBP/JPY has fallen from 147.62 to 146.56 the low, (currently testing the 50-hr SMA at 146.62). USD/JPY is holding up the downside with a bid from 110.34 to 110.71 the high as Wall Street rallies.
GBP/JPY levels
GBP/JPY can target the rising channel’s support that comes in line with the rising 100-hr SMA at 146.32. A break of which opens space down to 145.80 (200-hr SMA) and 145.20, (beginning of July lows). To the upside, 147.61 guards 148.00 and the 100-D SMA at 148.30.
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