GBP/JPY: Bearish impulsive aims 151.00 on concerns over UK’s “Freedom Day”
|- GBP/JPY drops for fifth consecutive day, refreshes one-week low.
- UK PM Johnson backs cautious unlock despite isolating himself.
- Make UK CEO hints declines in British export to the bloc as permanent.
- Britain’s removal of activity restrictions and political drama surrounding it will be the key.
GBP/JPY stands on the slippery ground near 151.30, down 0.18% during the fifth day of losses amid Monday’s Asian session. The cross-currency pair takes offers amid concerns over the UK’s removal of the coronavirus-led restrictions even as the country witnesses a spike in the infections.
The latest victim of the virus is newly appointed Health Minister Sajid Javid, not to forget 54,674 new infections for Saturday, the biggest one-day increase since January.
Following the news of British diplomat’s covid infection, UK PM Boris Johnson and Finance Minister Rishi Sunak isolate themselves despite the nation’s fresh laws, effective from July 19, allows overruling such quarantines. The UK is up for a “Freedom Day”, as widely cheered by the media, but the policymakers are concerned over the virus variant that has been spreading faster.
The same could be heard in UK PM Johnson’s weekend video urging for caution as England heads to the removal of the activity restrictions. While portraying the unlock, Reuters said, “From midnight, laws in England requiring facemasks to be worn in shops and other indoor settings will lapse, as will capacity limits in bars and restaurants, and rules limiting the number of people who can socialize together.”
Elsewhere, the British think tank, Make UK report mentions five English regions together with Wales saw their percentage of exports going to the EU fall last year. Yahoo Finance quotes Make UK CEO Stephen Phipson saying, “There is a risk that the drop in exports to the bloc we have seen over the last couple of years will become structural and permanent.”
It should be noted that the European Commission President Ursula von der Leyen was in Dublin on Friday and raised concerns over the Northern Ireland (NI) protocol, adding more downside on the GBP/JPY prices.
On the other hand, Tokyo registers the fifth consecutive day of above 1,000 covid infections as Japan prepares for Olympics.
Amid these plays, S&P 500 Futures drop 0.30% while the US 10-year Treasury yields drop 3.2 basis points to 1.267% by the press time.
GBP/JPY traders will keep their eyes on the virus updates as the UK heads to unlock, as well as amid a light calendar.
Technical analysis
Although the monthly low surrounding 150.65 and the 150.00 threshold challenge GBP/JPY sellers, the pair buyers are less likely to take the risk of entry until witnessing a daily close past 50-day EMA level surrounding 153.00.
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