GBP/JPY slides below 138.50 weighed by a vulnerable pound
|- GBP/JPY's reversal from 140.00 area extends to 138.35.
- Brexit uncertainty and Scotland's referendum hurt the pound.
- GBP/JPY eroding trendline support at 138.40.
The sterling is trading lower against the Japanese yen for the second consecutive day, giving away most of the ground taken earlier this week. Pound’s reversal from intra-week highs right below 140.00 has extended on Friday to 138.35 lows so far.
Pound dives on Brexit and Scottish referendum woes
The pound has dropped against its main rivals on Friday, weighed by the ongoing uncertainty about the Brexit negotiations and talk about a new Scotland’s independence referendum
The standstill in the Brexit trade talks continues with only five weeks left to clinch a deal to avoid an unorderly exit from the EU. The comments from some negotiators, warning that differences in key issues like the fishing rights keep blocking the agreement, have dampened investors’ confidence on a deal.
Beyond that, Nicola Sturgeon, the leader of the Scottish National Party, affirmed today that she wants to celebrate a second independence referendum in the earlier part” of the next parliamentary term, which begins next year. This has added negative pressure on the pound.
GBP/JPY: Testing trendline support at 138.40
At the moment, the pair is testing support on the upward trending support line from October 30 lows, now at 138.40. Below here, the 138.00 psychological level and 137.20 (November 19 low) would come into focus. On the upside, immediate resistance lies at 139.10/20 (intra-day highs) and above here, 139.85 (November 25, 26 highs) and 140.00 round level.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.