- GBP/JPY extends losses from the monthly top.
- UK PM Johnson discharged from the hospital but will remain away from work.
- Chancellor Sunak cites fears of a 30% reduction in GDP.
- Markets in the UK/US are off for Easter Monday holidays.
While extending its pullback from the monthly top for the second day in a row, GBP/JPY drops to 134.90, down 0.10%, as the Tokyo trading begins for Monday. The coronavirus-led risk-off joins downbeat comments from the UK Chancellor Rishi Sunak to recently weigh on the pair.
The coronavirus (COVID-19) cases are rigorously approaching two million mark and have recently pushed the US to take the helm as the global hotspot. With the fears emanating from the world’s largest economy, investors rush to risk-safety and favor the Japanese yen.
Also supporting the risk-off moves were the latest comments from the UK’s Finance Minister Rishi Sunak. As per The Times, the Chancellor is said to have told colleagues that the nation’s GDP could fall by as much as 30 percent between April and June as cabinet colleagues call for restrictions to be eased.”
On the contrary, the UK PM Boris Johnson left the hospital on Sunday after being shifted from the Intensive Care Unit (ICU) earlier. However, the Tory leader isn’t expected to resume working and will continue to recover at the Chequers, as per No10 spokesman.
Amid all these, the US 10-year Treasury yields remain mostly unchanged near 0.73% but the US stock futures and Japan’s NIKKEI portray risk-off with losses.
Considering the absence of major market data/events, due to the Easter Monday, the pair traders will keep eyes on the virus updates for fresh impulse.
Technical analysis
The pair’s downside break below the three-week-old rising trend line, coupled with sustained trading below 50-day EMA, keep sellers directed to 21-day EMA level of 134.00. Alternatively, the support-turned-resistance, currently at 135.55, followed by a 50-day EMA level around 136.00, will restrict the pair’s upside during the U-turn.
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