GBPJPY is drifting lower for a second day as the UK and EU restart in-person Brexit talks this weekend. The talks went virtual after a member of the EU side tested positive for the coronavirus.
The mood ahead of the talks is not very exuberant as the BBC reports that the EU’s Chief Negotiator was considering not turning up to London if the UK didn’t give some leeway, while other sources say the talks could be brief. The two sides are still not seeing eye-to-eye over fishing, a level playing field for business, and the enforcement of the agreement. This doesn’t have the tone of the “95% done” comments ahead of last weekend. The two sides have until December 31st to avoid W.T.O. rules and tariffs but they also have to put the deal to the UK and EU Parliament, and then the EU27 countries, so time is running out.
The Yen has been under some pressure after inflation figures last week showed a further dip into deflationary territory for the Japanese currency with a -0.4% reading compared to expectations for 0.3%. The numbers show that the Yen has another uphill battle with stimulus after they finally started to see inflation before the virus hit. The Yen still has safe haven status and this could play out if Brexit talks sour.
GBPJPY Technical Outlook
GBPJPY has seen a rally fade ahead of the 140.00 level and this could play out as a double top. The 138.00 price will be key, which was the resistance in October. A move below there would see losses to 135.00. Traders could short today with a stop at 140.00. 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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