GBP/JPY lacks momentum amid trade/political uncertainty

  • GBP/JPY struggles due to mixed clues concerning Brexit, US-China trade deal.
  • Geopolitical tension surrounding Iran also adds to the risk aversion.
  • UK PM’s EU visit will be in the spotlight.

Following a ‘Doji’ formation on Tuesday’s daily chart, GBP/JPY remains modest as it makes the rounds to 129.24 during the Asian session on Wednesday.

The US President Donald Trump recently reiterated his lack of readiness to do a trade deal with China while the US Secretary of State Mike Pompeo sounded positive while expecting an end of the trade war by 2020. On a different page, Mr. Pompeo keeps firming the US angst against Iran while saying that the US will take every action consistent with its sanctions to prevent Iranian tanker from delivering Oil to Syria.

In a case of Brexit related headlines, Germany seems to seek a solution of the present Brexit deadlock and the same stops the British Pound (GBP) from declining further ahead of the UK Prime Minister Boris Johnson’s key visit to the EU.

With this, the market’s risk tone remains heavy and the treasury yields lose prior run-up.

Other than British PM’s two-day EU visit, markets will also observe trade/geopolitical headlines for fresh impulse.

Technical Analysis

Yesterday’s ‘Doji’ candle signals the reversal of the quote’s earlier recovery, which in turn highlights 128.30 and 127.50 supports whereas 21-day exponential moving average (EMA) level of 130.18 acts as near-term key resistance ahead of watching over August 02 high of 130.42 and July-end low surrounding 131.60/80.

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