GBP/JPY struggles near two-day lows, just above mid-136.00s ahead of UK PMIs
|- A combination of factors exerted some pressure around GBP/JPY for the second straight day.
- Persistent Brexit-related uncertainties continued undermining the sentiment around the GBP.
- The prevalent cautious mood benefitted the safe-haven JPY and added to the intraday selling.
The GBP/JPY cross edged lower through the early European session and dropped to two-day lows, around the 136.65 region in the last hour.
The cross added to the previous day's modest losses and remained depressed for the second consecutive session on the last trading day of the week. Persistent Brexit-related uncertainties kept the GBP bulls on the defensive. Adding to this, the prevalent cautious mood benefitted the safe-haven Japanese yen and further contributed to the offered tone surrounding the GBP/JPY cross.
Despite the resumption of Brexit talks, investors remain concerned about disagreements over fishing access and competition issues. It is worth recalling the EU's chief Brexit negotiator, Michel Barnier warned on Wednesday that level playing field remains a fundamental concern and that there will be no trade deal without a fair solution for fisheries.
On the other hand, the underlying cautious mood – as depicted a weaker trading sentiment around the equity markets – benefitted the safe-haven Japanese yen. This, in turn, exerted some additional downward pressure on the GBP/JPY cross. That said, the downside seems limited, at least for the time being, as bears might await Brexit updates before placing fresh bets.
Apart from this, the incoming Brexit-related headlines, the release of the flash version of the UK PMI prints for October will influence the GBP price dynamics. This, along with the broader market risk sentiment, might produce some meaningful trading opportunities around the GBP/JPY cross.
Technical levels to watch
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