GBPJPY was trading higher by 0.25% on Monday despite stronger than expected GDP data from the Japanese economy. The pound is stronger after two key Brexit aides left the government.
Japanese preliminary GDP numbers for the third quarter beat expectations with a reading of 5%, compared to expectations of 4.4%. The annualized number came in at 21.4% with analysts expecting 18.9%. The data is another sign that the Japanese economy is rebounding, while the U.K. economy is moving back to virus restrictions and lockdowns. This should create support for the Yen in coming months or quarters.
Brexit talks are still ongoing with the UK negotiator David Frost arriving in Brussels to meet his EU counterpart. Ireland has warned that time is running out and there may only 7-10 days to find an agreement.
The pound is likely higher after the U.K.s top Brexit aide Dominic Cummings left his post earlier than his expected year-end deadline. The divisive advisor was a key part of Boris Johnson’s Brexit strategy and the move may have traders expecting that a more EU-friendly trade agreement is coming with dissenters being ousted. Statements out of the U.K. say they will stick to their red lines for the remainder of talks, which have so far been fruitless.
GBPJPY Technical Outlook
GBPJPY was trading above the recent resistance level at 138.00 but the pair is weak and risks a sell-off below that level again. The first target would be 136.00 where the 50-day moving average sits. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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GBPJPY Daily Chart
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