GBP/JPY clings to 140.00 as a lack of major catalysts, Japan off limit upside momentum
|- GBP/JPY lacks the strength to extend the latest recovery.
- Positive headlines from trade/Brexit confront Japanese holidays.
- UK Markit Construction PMI will be in the spotlight for now.
With a fewer catalyst to cheer Brexit optimism amid Japanese off, GBP/JPY seesaws around 140.00 during early Monday.
Recent headlines concerning the United Kingdom (UK) has been positive as recent polls from collected by Reuters signal that the Tories hold comfortable lead over the opposition Labour party and could win in December snap election. Also, Times ran a story that the UK’s Prime Minister Boris Johnson will remove the threat of a no-deal Brexit in his Conservative Party's election manifesto, which in turn cites another positive scenario for the British Pound (GBP). The same could also be connected to the United States (US) President Donald Trump’s expectations that the UK PM Johnson and Brexit party leader Nigel Farage will unite.
However, the bulls are capped off-late as a lack activity amid Japan’s Culture Day celebrations and light economic calendar question momentum traders.
News surrounding the US-China trade deal has also been upbeat recently with the US President signaling a deal to be signed this month near the US.
Investors will now look forward to the UK’s Markit Construction PMI for October, while also taking care of Brexit/trade headlines, to determine near-term trade direction. The UK Markit Construction Purchasing Managers Index (PMI) is expected to recover to 44 from 43.3
Technical Analysis
A downward sloping trend line since October 17, at 140.55, becomes immediate upside barrier to the pair ahead of confronting the previous month top of 141.51. Meanwhile, the latest low near 138.87 and June month high around 138.30 can limit the pair’s short-term declines.
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