GBP/JPY trades at multi-week lows near 144

GBP remains weak since Carney's remarks last week.
Brexit uncertainty continues to weigh on the pound.

Eren Sengezer FXStreet

After recording heavy losses in the second half of the previous week, the GBP/JPY pair failed to make a meaningful recovery on Monday and fell to its lowest level since June 28 at 144.03. As of writing, the pair was trading at 144.20, losing 0.35% on the day.

Uncertainties surrounding Brexit seem to be the primary reason why the pound is finding it difficult to gather strength against its rivals. Earlier today, the UK government spokesman James Slack said that Trade Minister Liam Fox's comments about the risk of a no-deal outcome were reflecting the reality and stated that the government had to prepare for all eventualities. Slack further added according to British Prime Minister Theresa May, a no-deal would be a better option than a "bad Brexit deal."

On the other hand, the JPY seems to be finding demand as a safe-haven on Monday amid the dismal performance of risk-sensitive EM currencies, which puts extra weight on the GBP/JPY's shoulders.

During the Asian session on Tuesday, overall household spending and labor cash earnings data from Japan will be looked upon for fresh impetus. The only data in the UK economic docket on Tuesday will be Halifax House Prices.

Technical outlook

With a decisive break below 144 (daily low/psychological level), the pair could extend its losses toward 143.20 (May 29 low) and 142.70 (Sep. 11, 2017, low). On the upside, resistances could be seen at 144.75 (daily high), 145.55 (Aug. 2 high) and 146.30 (50-DMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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