- The latest Brexit-related comments exert some fresh pressure on the GBP.
- Risk-on mood dents JPY’s safe-haven status and helped limit the downside.
- The focus remains on Johnson’s Brexit-related meeting with Merkel and Macron.
The GBP/JPY cross lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Monday.
The cross struggled to build on last week's attempted bounce from multi-year lows, with a combination of diverging forces failing to provide any meaningful impetus and leading to a subdued/range-bound price action - around the 129.00 handle - on the first day of a new trading week.
Brexit uncertainties weigh on the GBP
Comments by the European Commission spokeswoman, saying that we are prepared for all eventualities in case of a no-deal Brexit, exerted some fresh downward pressure on the British Pound and kept a lid on any meaningful up-move for the cross.
This was followed by the UK PM Boris Johnson's remarks, reiterating to come out of the EU on 31 October - with or without a deal - and further dented the already weaker sentiment surrounding the Sterling, though the prevalent risk-on mood helped limit the downside.
The fact that the US government announced recently that they will be delaying the ban on Huawei to buy supplies from US companies for 90 days boosted investors' appetite for perceived riskier assets - like equities - and weighed on the Japanese Yen's safe-haven status.
Apart from this, bearish traders also seemed to refrain from placing any aggressive bets ahead of Johnson’s scheduled meeting with German Chancellor Angela Merkel on Wednesday and French President Emmanuel Macron on Thursday.
Hence, it will be prudent to wait for a sustained move in either direction before positioning for any meaningful momentum amid absent relevant market-moving economic releases on Monday.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.