- GBP/JPY seesaws around mid-August lows amid increasing odds of a snap election at the UK.
- Latest headlines concerning Brexit, the US-China trade are also downbeat.
- Investors will keep an eye over the British Parliament’s open for fresh impulse.
GBP/JPY fails to ignore the political/Brexit uncertainty at the UK as it trades near the August 16 low, flashed on Monday, while taking rounds to 128.20 during early Asian morning session on Tuesday.
The latest threat from the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson, to call for a snap election if he fails to gain the Parliament’s support for his business on Wednesday, adds uncertainty surrounding the British politics at the time when major cross-party Members of the Parliaments (MPs) stand ready to oppose his prorogation of the house and push him for Article 50 extension.
As per the ITV reporter Robert Peston, British ministers have agreed to vote on Wednesday on whether to hold a general election on October 14 if the government is defeated on Tuesday.
Additionally, latest reports from the BBC and the UK Telegraph conveys reports from the UK PM’s key Brexit negotiators, including Stephen Barclay and Dominic Cummings, suggesting no breakthrough during the discussions with the EU as the regional lawmakers refrain from dropping the backstop.
On the other hand, the fact that China’s Global Times again criticized the US, as always, the Trump administration activates fresh tariffs and the US traders’ return from the extended weekend are likely to keep risk-off alive. Also, Sankei recently published a news report claiming that the Japanese PM Shinzo Abe will revamp his Cabinet on September 11.
Moving on, today’s market focus will be on the UK Parliament open as it resumes working after a long summer break with many political challenges stand ready to make some noise. Should the UK PM fail in today’s confidence vote, the British Pound (GBP) will extend downward trajectory amid further political uncertainty.
Technical Analysis
While 127.50 holds the key to the quote’s run-down to August month low of 126.54, buyers are less likely to return unless breaking August 22 top near 130.72.
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