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  • GBP/JPY sellers catch a breather after declining over 80 pips to 138.92.
  • UK PM Boris Johnson, EU President Ursula von der Leyen (VDL) remain far apart after the dinner chat.
  • A firm decision on the future Brexit talks will be out by Sunday.
  • UK data dump, Brexit headlines and other risk catalysts are the key.

GBP/JPY consolidates the post-Brexit announcement losses around 139.50, down 0.20% intraday, during the early Asian trading on Thursday. The pair recently slumped from 139.75 to 138.92 as UK PM and the EU Chief failed to offer any positive news after their long dinner talks.

After nearly three hours of talks over the dinner, UK PM Johnson, EU Chief VDL and their Brexit negotiators, David Frost and Michel Barnier respectively, could only repeat their disagreements. Following the dinner, the European Union (EU) President VDL said that they remain far apart. While offering details, the UK source said, “PM Johnson and EU’s VDL agreed that by Sunday a firm decision should be taken about the future of the talks.”

Other than the latest Brexit disappointment, further wait for the US stimulus and the covid vaccine joins record high infections and virus-led deaths in America to weigh on the risks. While portraying the same, Wall Street benchmarks turned red by the end of Wednesday whereas S&P 500 Futures struggle for a clear direction below 3,700 after marking a negative close the previous day.

The pair traders will keep their eyes on the EU leader’s update to the regional members during today’s summit, as well as the UK’s reaction to the Brussels visit, for immediate direction. Also important will be the UK’s data dump for October and Japan’s Producer Price Index (PPI) for November.

It should also be noted that the updates over the US Food and Drug Administration’s (FDA) approval of Pfizer’s covid vaccine and stimulus news can offer extra directives to the GBP/JPY prices.

Overall, Brexit woes are likely to keep weighing the quote unless any clear decision arrives. However, optimism concerning the US stimulus and vaccine may battle the bears.

Technical analysis

Although the quote recently bounced off the 21-day SMA level near 138.90, the corrective recovery can’t be taken seriously unless breaking the one-month-old resistance line, at 140.80 now.