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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends its decline amid upbeat US consumer confidence

EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. 


GBP/USD rises above 1.24 as Brexit uncertainty prevails

GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension as Johnson faces growing criticism.


USD/JPY: holding in higher ground ahead of US Retail Sales

Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 critical Fibonacci support.


Gold remains on track to end week below $1,500

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. 

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more