- GBP/JPY is probing Tuesday’s highs at 139.80, ahead of a potential test of the key 140.00 level.
- GBP remained buoyant on Wednesday despite signs that Brexit talks are still deadlocked.
GBP/JPY is trading near its highs for the week, having at one point matched Tuesday’s high at 1.3980, before pulling back slightly. On the day, the pair trades with gains of just over 30 pips or 0.2%.
GBP bid despite Brexit deadlock
Today’s Brexit updates indicate that negotiations between the EU and UK are still at a deadlock, with the French Foreign Minister publicly calling out the UK for running down the clock, something which well-connected UK sources have reportedly said the UK government sees as a way to put public pressure on the UK to make further concessions. Other EU sources have reportedly said that this was not a good week for talks. This comes on the back of EU Commission President von der Leyen saying on during the early part of the European session on Wednesday that she still could not say yet if there would be a deal.
Regardless of signs of continued deadlock, GBP has been largely bulletproof. Market’s seem to be showing either signs of Brexit headline fatigue or confidence (or complacency…) that regardless of what brinksmanship goes on over the coming days, a deal is, in the end, the most likely eventuality given that it is strongly in the economic interests of both sides in the midst of the much larger Covid-19 health and economic crisis.
GBP was also largely unresponsive to UK Finance Minister Rishi Sunak’s sobering one-year spending review and Office of Budget Responsibility forecasts, which forecast a UK deficit of £394B in 2020/2021, which equates to 19% of GDP (the highest deficit in the country’s more than 300-year history).
GBP/JPY eyes test of 140.00
With GBP/JPY probing Tuesday’s highs at 139.80, a break is seemingly becoming ever more likely. This would open up a test of the psychological 140.00 level. If this area of resistance also goes, then the route towards a test of highs of the month at 140.32 would be cleared.
Conversely, to the downside, notable areas of support include the 139.00 round number, which also happens to coincide with the 61.2% Fibonacci retracement from the September high at 142.74 to low at 133.03. Not far below this area of support is the 16 November high at 138.88.
GBP/JPY eight hour chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800, as traders lack directional impetus amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.