- GBP/JPY sellers catch a breather after declining over 80 pips to 138.92.
- UK PM Boris Johnson, EU President Ursula von der Leyen (VDL) remain far apart after the dinner chat.
- A firm decision on the future Brexit talks will be out by Sunday.
- UK data dump, Brexit headlines and other risk catalysts are the key.
GBP/JPY consolidates the post-Brexit announcement losses around 139.50, down 0.20% intraday, during the early Asian trading on Thursday. The pair recently slumped from 139.75 to 138.92 as UK PM and the EU Chief failed to offer any positive news after their long dinner talks.
After nearly three hours of talks over the dinner, UK PM Johnson, EU Chief VDL and their Brexit negotiators, David Frost and Michel Barnier respectively, could only repeat their disagreements. Following the dinner, the European Union (EU) President VDL said that they remain far apart. While offering details, the UK source said, “PM Johnson and EU’s VDL agreed that by Sunday a firm decision should be taken about the future of the talks.”
Other than the latest Brexit disappointment, further wait for the US stimulus and the covid vaccine joins record high infections and virus-led deaths in America to weigh on the risks. While portraying the same, Wall Street benchmarks turned red by the end of Wednesday whereas S&P 500 Futures struggle for a clear direction below 3,700 after marking a negative close the previous day.
The pair traders will keep their eyes on the EU leader’s update to the regional members during today’s summit, as well as the UK’s reaction to the Brussels visit, for immediate direction. Also important will be the UK’s data dump for October and Japan’s Producer Price Index (PPI) for November.
It should also be noted that the updates over the US Food and Drug Administration’s (FDA) approval of Pfizer’s covid vaccine and stimulus news can offer extra directives to the GBP/JPY prices.
Overall, Brexit woes are likely to keep weighing the quote unless any clear decision arrives. However, optimism concerning the US stimulus and vaccine may battle the bears.
Technical analysis
Although the quote recently bounced off the 21-day SMA level near 138.90, the corrective recovery can’t be taken seriously unless breaking the one-month-old resistance line, at 140.80 now.
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.