GBP/JPY looks for clear direction around 143.30 amid Brexit disappointment, risk-off
- GBP/JPY struggles to extend the day-start gains following mixed trading on Tuesday.
- UK PM Johnson’s WAB got fourth change from the House of Lords, British Average Earnings tamed broad risk aversion earlier.
- UK CBI Trends Survey decorates the economic calendar, trade/Brexit headlines will be followed for risk assessment.
GBP/JPY remains modestly changed while trading around 143.35 during Wednesday’s Asian session. The pair struggled between upbeat UK data and broad risk aversion the previous day.
Following three changes to the UK PM Boris Johnson’s Withdrawal Agreement Bill (WAB) voted on Tuesday, the UK Members of Parliaments (MPs) recently voted down one more amendment from the key bill. “Lords passed an amendment which would permit cases to be referred to the Supreme Court to adjudicate on whether to depart from EU case law,” says the UK’s Express.
Fears of a tough start to the EU-UK trade negotiations also crossed wires, via The Telegraph, off-late. The news relied on the document while stating that the region prepares for the worse deal to the UK than it offered to Canada or Japan.
The better than expected 3.1% reading of Average Earnings to 3.2% cut the odds of the BOE’s rate cut during the month-end meeting on Tuesday. Also contributing to the British Pound’s (GBP) strength were softer than forecast 22.6K figures of Claimant Count Change.
On the other hand, the market’s risk tone weighed down by the concerns of China’s coronavirus outbreak and US President Donald Trump’s impeachment hearings. Further, the International Monetary Fund’s (IMF) downward revision to global growth forecast and China’s assurance that its trade with Europe won’t be hurt due to the deal with the US also favor risk-off.
As a result, the US 10-year treasury yields registered a loss of six basis points (bps) on Tuesday.
Investors will now concentrate on the trade/Brexit news for fresh impulse amid a light economic calendar. Even so, the January month CBI Industrial Trends Survey, expected -23 versus -28 prior, from the UK can offer intermediate moves.
Technical Analysis
Unless providing a daily closing below a 21-day SMA level of 142.97, GBP/JPY is less likely to visit the monthly bottom surrounding 142.80.