GBP/JPY: Trapped below 133 amid Brexit uncertainty, market's wait-and-watch mood


  • GBP/JPY refrains from rising past-six weeks’ high.
  • UK PM keeps his Brexit pledge intact, expected to re-put the early election motion after Parliament resume.
  • Traders await ECB, US consumer-centric data for fresh impulse.

Fresh challenges to soft Brexit, coupled with market’s wait-and-watch mood, restrict the GBP/JPY pair’s upside beyond 133.00 mark, as the quote flashes 132.86, on early Wednesday.

Having witnessed multiple failures in the United Kingdom’s (UK) House of Commons, which led to the Parliament’s prorogation till October 14, the Prime Minister (PM) Boris Johnson is likely softening his grip over the Northern Ireland Backstop. However, calls of his another attempt to gain support for re-election after the Parliament resume and firm pledge to leave the EU on October 31 keeps the hard Brexit risk alive.

On the other hand, market players are showing less interest in geopolitical headlines concerning the Middle East and North Korea ahead of the European Central Bank (ECB) meeting, the US Consumer Price Index (CPI) and Retail Sales.

Considering the latest downbeat activity numbers and inflation data from the regional economy, not to forget threats of the bloc’s recession, the ECB is more likely announce a dramatic move during this week’s monetary policy as being the second-last by the President Mario Draghi.

Following that, August month numbers for the US CPI and Retail Sales will be the key to watch. While the CPI might portray weak price pressure, Retail Sales is also likely to keep the global worries on the plate.

It should, however, be noted that optimism surrounding the US-China trade meeting, in October, still helps the bond yield to remain around a month’s high.

Technical Analysis

Buyers seek a sustained break of 133.00 in order aim for July 18 low of 133.85, failing to which can recall 132.20 and August 22 high near 130.70.

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.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD extends gains toward 1.31 after upbeat UK wage figures

GBP/USD is extending its gains and advancing toward 1.31 after UK wage figures beat expectations with 3.2% annually. The unemployment rate remained at 3.8% in November. 

GBP/USD News

EUR/USD recaptures 1.11 amid upbeat German figures, USD weakness

EUR/USD is trading above 1.11 after the German ZEW Economic Sentiment beat with 26.7 points. Presidents Trump and Macron agreed not to slap tariffs on each others' countries. The US dollar is retreating.

EUR/USD News

Market delays the trip to the moon

The crypto markets continue to turn to a new bullish phase. This turnaround began at the beginning of the year after a consolidation phase that started in mid-2019. 

Read more

Gold retreats from 2-week tops, drifts into negative territory

Gold failed to capitalize on its early uptick to near two-week tops and dropped to fresh session lows, around the $1560 region in the last hour.

Gold News

USD/JPY: Weaker near 110.00 amid China virus fears, BOJ's status-quo

The Japanese yen retains the bid tone following the Bank of Japan's (BOJ) status-quo, keeping USD/JPY under pressure near the 110 level amid risk-off market profile. S&P 500 futures drop 0.40% while the US Treasury yields are down over 1.50%, as the sentiment is hit by the coronavirus outbreak. 

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures