- GBP/JPY steps back from 13-day top, under pressure of late.
- UK, EU warned over NI protocol deadlock even as policymakers brace for further talks.
- UK’s daily infections rise for second day but weekly count falls 22%, Japan braces to take more prefectures under emergency.
GBP/JPY justifies the previous day’s Doji candlestick formation with a pullback to 152.85 ahead of Friday’s Tokyo open.
The cross-currency pair jumped to the highest since July 13 on Thursday after Brexit optimism and weaker yen favored bulls. However, fresh chatters over Brexit and coronavirus tames the prior risk-on mood.
“The UK and EU have both taken a ‘fundamentally flawed’ approach to the Northern Ireland Protocol, a House of Lords committee has concluded,” said the BBC. Before that, the British and European Union (EU) policymakers were optimistic over holding further negotiations to tackle the Northern Ireland (NI) protocol issue.
Elsewhere, Britain’s 31,117 daily coronavirus cases mark the second day of increase but fall 22% during the last seven days. Alternatively, Japan’s covid numbers cross the 10,000 mark for the first time and push the policymakers to re-think emergencies in more prefectures. Japan’s Kyodo News quotes anonymous government sources in this regard while saying, “The government is planning to add three prefectures neighboring Tokyo, as well as Osaka Prefecture, to areas under the COVID-19 state of emergency amid a resurgence of the coronavirus.”
On a different page, downbeat US data backed the market’s hope for further stimulus, favoring the risk-on mood. Also backing the optimism is the current talks over US President Joe Biden’s infrastructure spending plan in the American Senate.
Amid these lays, S&P 500 Futures drop 0.35% after rising around half a percent to refresh the record top on Wall Street.
Looking forward, Japan’s preliminary reading of June’s Industrial Production and Retail Sales for May can entertain the pair traders. However, qualitative catalysts are more important for fresh direction, likely towards the south.
Technical analysis
A Doji on the daily chart below 50-DMA, near 153.55, suggests further pullback of GBP/JPY. However, 100-DMA tests intraday sellers around 52.60.
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