GBP/JPY drops to 2-week low as risk off rules ahead of UK lawmakers' return to parliament

Risk tone remains heavy as the UK lawmakers to return parliaments after a long break.
The fears of multiple Brexit options to be discussed and might be voted dragged the GBP/JPY pair downward.

Anil Panchal FXStreet

The GBP/JPY pair slid to the lowest levels since April 10 during the early Asian trading on Tuesday. While Easter recess in the UK parliament confined the pair moves off-late, risk-off shook the quote as investors remained cautious ahead of the British members of the parliaments (MPs) return to their desks.

Speculations that the UK PM will face another no-confidence motion dragged the British Pound (GBP) on Monday but the losses were confined by the news that the PM May will restart cross-party talks to break the Brexit deadlock and safeguard her position.

Though, investors fear volatile trading sessions when the UK lawmakers return to the parliament after a long break ranging from April 11. News reports signaling that many Brexit options are to be discussed in the British parliament have been challenging the investor sentiment recently.

10-year treasury yield of the US government trimmed one basis point to 2.58% at the initial hours after Tokyo open.

In addition to the Brexit developments, the key risk events like the US pressure on Iranian oil exports and the US-China trade deal will also be observed closely.

GBP/JPY Technical Analysis

During the pair’s extended downturn, 200-day simple moving average (SMA) near 144.60, followed by 100-day SMA level of 143.60, may entertain sellers.

On the contrary, 50-day SMA level of 145.75, current month highs near 147.00 and 147.20 are likely short-term upside caps for prices ahead of highlighting 147.40 and 148.30 numbers to the north.

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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