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GBP/JPY retreats from 18-month high on Brexit deal

  • GBP offered on Brexit deal confirmation, sell the fact?
  • Losses in JPY keep GBP/JPY in the positive territory.

GBP/JPY has backed off from the 18-month high of 153.33, but still trades positive on the day at 152.90, courtesy of the weak tone in the Japanese Yen.

The drop from the session high of 153.33 indicates markets had already factored-in the Brexit deal. Hence, investors could be taking profits on their GBP longs following the official confirmation from UK's May and EU's Juncker.

Still, the sell the fact trade has not been able to push GBP/JPY into the negative territory, given the rise in the treasury yields is hurting the Japanese Yen. Also, the European equities could remain well bid on Brexit deal, thus ensuring the Yen has nowhere to go except down.

Ahead in the day, the Pound could swing both ways as Brexit talks proceed to the second stage and investors could take cues from the UK manufacturing and trade balance number due today.

GBP/JPY Technical Levels

A move above 153.33 (session high) would open up upside towards 153.63 (May 2016 low) and 154.00 (psychological levels). On the downside, breach of support at 152.29 (session low) could yield a sell-off to 151.68 (5-day MA) and 150.83 (10-day MA).

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