GBP/JPY remains sidelined around three-week high above 152.00 on cautious mood
- GBP/JPY seesaws inside a choppy region near multi-day top after five-day uptrend.
- Pre-NFP caution battles UK PM Johnson’s push for tax hike, booster jabs.
- Brexit, covid woes also weigh on sentiment even as traders remain hopeful.
- UK Services PMI join the watcher’s list but US NFP, risk catalysts are more important.
GBP/JPY takes rounds to a 20-pips area above 152.00 during a sluggish Asian session on Friday. The pair refreshed multi-day top the previous day amid the market’s optimism for the Fed’s plans. Also favoring the quote could be the vaccine hopes in the UK.
Market players reject the Fed’s tapering concerns amid a run of downbeat early signals for today’s US jobs report. On Thursday, the Initial Jobless Claims and Continuing Claims eased from the market consensus for the week ended on August 27. The four-week average of Initial Jobless Claims also declined from 366.75K to 355K.
It’s worth mentioning that UK PM Johnson also pushed for fastening vaccine jabs for 16–17 years old, as well as confirmed plans for COVID booster jabs in September, per the Sky News.
Also favoring the bulls could be the reductions in the US hospitalizations. Alternatively, the UK covid numbers are on the spike of late with the death toll refreshing multiday high and infections rising past 38K.
It should be noted that the UK’s inability to tame the Brexit spill on the reduction of the goods exports jostles with the jump in services rendered to plot the departure fears. On the same line, China’s rush to grab the financial power of the City of London and UK PM Johnson’s push for more taxes also challenge the GBP/JPY prices.
Furthermore, worsening virus conditions in Japan and political challenges for Prime Minister Yoshihide Suga underpin the Japanese yen’s (JPY) safe-haven demand.
While portraying the mood, S&P 500 Futures remain sluggish even as the Wall Street benchmarks closed mildly positive on Thursday.
Moving on, the final reading of the UK Services PMI for August, expected to confirm 55.5 reading, as well as the Brexit, covid and vaccine headlines, will be important for GBP/JPY traders. However, the US Nonfarm Payrolls (NFP) surpasses all and needs to be closely watched for near-term market moves.
Read: NFP Preview: How low can the dollar go? Extremely low expectations point to a greenback comeback
Technical analysis
Despite crossing 50-DMA, around 152.00, a downward sloping trend line from late May does challenge the GBP/JPY bulls near 152.40.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
