GBP/JPY: Another day in the red on Brexit uncertainty, global pessimism, 144.70/65 in spotlight

Uncertainty over Brexit and fears of global economic slowdown continues to weigh on GBP/JPY.
50-day and 200-day SMA confluence seem crucial for sellers.

Anil Panchal FXStreet

The British Pound (GBP) trades near 145.20 versus the Japanese Yen (JPY) during early Thursday. The GBP/JPY pair stretched its losses overnight as doubts surrounding global economic growth and Brexit uncertainty continues to weigh on investor sentiment.

While recent comments from the Federal Reserve, European Central Bank (ECB) and Reserve Bank of New Zealand (RBNZ) policymakers state downside risks to their and global economy, political drama surrounding Brexit gains additional attention and drags GBP/JPY downwards.

On Thursday, British lawmakers voted down all the eight Brexit proposals in the House of Commons and showed lack of unity in members of parliament (MPs). While the same could have been pleased the UK PM Theresa May on her readiness to resign if third Brexit plan gets through the house, it actually didn’t give much relief as an influential Tory member Jacob-Rees Mogg, who previously announced his support to PM May’s Brexit proposal took a U-turn.

With the pessimism surrounding economic and political front, 10-year US government bonds slid to 15-month low and magnified market preference for safe-havens like the USD, the JPY and the Gold. However, Gold couldn’t benefit much due to the greenback’s inverse relation with the bullion.

Developments concerning the US-China trade deal from the US delegates’ two-day Beijing visit and Brexit will bear market attention for the time being.

GBP/JPY Technical Analysis

Given the quote’s failure to recover, 144.70-65 support-confluence encompassing 50-day and 200-day simple moving average (SMA) becomes crucial for the sellers to watch as a break of which could drag prices to 100-day SMA level of 143.60 and then to 143.00 rest-point.

On the upside, 145.80, 146.50 and 146.80 could act as immediate resistances whereas 147.40, 148.00 and 148.80 might entertain buyers then after.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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