GBP/JPY remains choppy below 21-DMA amid mixed trade/political signals

  • GBP/JPY clings to 129.30 amid a lack of market reaction to latest headlines.
  • Germany opens the door for Irish backstop alteration before France shuns chances of renegotiation.
  • Risk-on remains in play despite latest geopolitical tension concerning Middle East, North Korea.

With the Brexit uncertainty keep grabbing the headlines, coupled with trade positive news from the US and geopolitical tension concerning the Middle East and North Korea, GBP/JPY trades near 129.30 during the Asian session on Thursday.

While the US President Donald Trump’s trade-positive tweets have helped the risk sentiment to remain firm, North Korea’s worrisome statements for the US military moves and the US Defence Secretary’s comments for the hermit kingdom as well as Iran keep exerting downside pressure on the pair.

In case of the Brexit, the UK Prime Minister (PM) might be happy after his visit to Germany as the EU’s largest economy said the calls to Irish backstop alternation can be accepted if backed by good proposal within 30 days. However, French authorities stand ready to challenge the mood as Reuters said that the French President turned down the request for renegotiation before meeting the UK PM.

On the economic calendar, Japan’s Nikkei Manufacturing PMI for August slipped below 49.8 forecasts to 49.5.

Risk sentiment carries previous strength with the US 10-year Treasury yield marking 1.580% by the press time.

While there prevails no major data scheduled for publishing, investors will keep an eye over British PM’s France visit and opening of the Jackson Hole Symposium for fresh impulse.

Technical Analysis

A 10-day simple moving average (DMA) around 128.50 offers immediate support ahead of dragging the quote to August 12 high near 127.50. On the contrary, 129.65, 21-DMA level of 129.90 and August 02 high of 130.45 can keep the near-term upside limited.

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