GBP/JPY: Bears cheer trade/political tension at fresh multi-month low
|- GBP/JPY drops to fresh low since September 2017 after recent political/trade pessimism.
- The opposition Labour party vows that the UK PM Johnson will witness no-confidence motion.
- Worsening signals of a trade spat between the US and China, coupled with likely tension amid the US and North Korea, favor safe-havens.
With the recent rush towards risk-safety, the GBP/JPY drops to fresh multi-month low on early Tuesday while trading near 128.43.
Leading among them is the UK’s opposition Labour party’s call to raise a no-confidence motion in the Parliament as soon as it resumes after the summer recess. Also weighing on the British Pound (GBP) are the statements from the EU that the UK Prime Minister (PM) Boris Johnson has no intention on renegotiation the Brexit deal, as per The Guardian.
Further emphasizing the safe-havens is the US-China trade tussle that has recently got bitter with the US officially terming the dragon nation as a currency manipulator. It should also be noted that North Korea’s recent run towards testing short range missile might gain the ire from the US and can propel the Japanese Yen (JPY) further towards the north.
Against the momentum was the UK’s BRC Like-For-Like Retail Sales (YoY) which matched 0.1% forecast during July.
Given the absence of major data, markets may keep highlighting trade/political headlines for fresh impulse.
Technical Analysis
Even if oversold conditions of 14-day relative strength index (RSI) indicate brighter chances of recovery towards 129.00 and 130.00 nearby resistances, bears might not refrain from targeting 2017 and 2016 lows near 125.62 and 123.47 during further declines.
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