GBP/JPY consolidates to 139.50 as risk-recovery confronts Brexit progress
|- GBP/JPY retraces in a reaction to the latest Brexit developments, risk events.
- After the EU’s (anticipated) three-month Brexit extension, UK’s snap election saga will entertain traders.
- Trade/geopolitical catalysts will also have their own say amid a lack of economic data/events.
Be it widely anticipated Brexit extension or the progress in the US-China trade talks, markets witnessed risk-positive headlines during the weekend. In a reaction to the same, the GBP/JPY pair takes the bids to 139.50 during the initial Monday’s Asian trading session.
As per the Guardian, the European Union (EU) is near to the final announcement of a three-month Brexit extension to January 31, 2020 with no clause supporting a renegotiation to the recently agreed deal. The leaked statement, as per the news, also turns down the French push for shorter extension while leaving door open for an early exit to the first day of the next month if the Brexit deal is ratified.
Elsewhere, the US-China diplomats make headway into the trade negotiations and are positive towards the latest phone call, the United States’ (US) Trade Representative (USTR) and China’s Commerce Ministry confirmed.
With this, global markets witness a positive start to the week with the S&P500 Futures seesawing in the positive territory with the US 10-year Treasury yields staying up until around 1.8% by the press time.
Looking forward, the week comprises many key events including the Parliamentary votes on the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson’s proposal for a snap election and monetary policy meeting by the Bank of Japan (BOJ) together with the quarterly outlook report. It should also be noted that the US Federal Reserve’s monetary policy meeting, which is expected to deliver another rate cut of 2019, will also be the key event of the week.
For today, markets will keep eyes on the trade/Brexit headlines for fresh directions as the economic calendar carries a few key data/events.
Technical Analysis
June month high near 138.30 and 21-day Exponential Moving Average (EMA) level close to 137.50 seem adjacent supports to limit pair’s short-term declines. On the contrary, pair’s rise beyond the monthly top of 141.51 becomes necessary for buyers to question late-May high around 141.75.
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