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GBP/JPY struggles around 147.60 amid Brexit headlines, UK employment data in spotlight

  • Mixed Brexit headlines, FOMC expectations and global growth concerns play their role.
  • UK employment figure can provide fresh impulse with Brexit progress being in the background.

GBP/JPY is mildly bid near 147.60 during early Tuesday. The pair has been struggling with the overall risk-on sentiment and Brexit developments. Next up in the traders’ radar will be British jobs data and progress over how the UK PM Theresa May prepares to confront the EU summit.

While expectations of monetary policy easing from the Fed and rejection of no-deal Brexit by the UK parliament seems in favor of the market’s recent risk-on mood, mixed set of headlines concerning further proceedings at the Britain and doubts over global growth challenge the pair’s an upside.

Latest among the Brexit headlines say the EU is ready for three-month extension to the March 29 deadline, PM May is expected to aim for nine to twelve month of a stretch, Tories are set for a strike if PM May doesn’t resign. Alternatively, recent data from the US, Australia and New Zealand haven’t been in market favor and continues to signal downside risk.

Additionally, PM May’s third Brexit proposal won’t be up for voting on Tuesday as the UK lawmakers oppose any deals similar to the previous ones that were already rejected. Hence, PM May is now forced to attend Thursday’s EU summit with empty hand requesting for a deadline extension.

The UK jobs report is set to release January month average earnings and unemployment rate details together with February month claimant count data at 09:30 GMT. No change is expected in the unemployment rate and average earnings excluding bonus numbers of 4.0% and 3.4%. However, headline average earnings could soften to 3.2% from 3.4% whereas claimant count change might also decline to 3.7K from 14.2K.

GBP/JPY Technical Analysis

Immediate ascending support-line stretched since March 08 at 147.00 may challenge short-term sellers, a break of which can print 146.50 and 145.40 on the chart whereas 200-day simple moving average (SMA) and two-month-old ascending trend-line, around 144.70/65, could limit further downside.

148.40 seem adjacent resistance ahead of the pair’s rise to 149.00 trend-line joining highs since September 2018.

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