GBP/JPY Price Analysis: Bears Dominating amid Risk-off, Eying BoE
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- GBP/JPY falls as the market sentiment remains cautious ahead of BoE.
- UK-France tension on fishing rights is slightly easing off.
- Japanese yen remains weak, as admitted by the Japanese Finance Minister.
The GBP/JPY price analysis shows a bearish scenario as the market sentiment is largely favoring pound sellers in the anxious market.
The GBP/JPY pair is at 155.27, down 0.25% at the time of writing on Tuesday.
The Sterling bears dominate amid anxiety in the market ahead of BoE and Fed due on Wednesday and Thursday, respectively.
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Among them are sanctions against the UK for the removal of raw materials because of Brexit, a break in France. A French government official told The Independent that nearly 50 more French fishing vessels were allowed into Jersey’s waters after announced French sanctions against British vessels.
In a similar report, Reuters said that UK police had begun negotiating with France. Response from France should be forthcoming by Wednesday. David Frost, Britain’s Brexit leader, will travel to Paris on Thursday morning for an early meeting. However, countless challenges go beyond the fishing issue, such as the Right to Northern Ireland (NI), adversely affecting future Brexit developments.
On the other hand, despite acknowledging that the yen is weakening, Japan’s financial chief Shunichi Suzuki did not mention the currency.
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According to Reuters, Bank of Japan members have stated that the spread will benefit the Japanese economy. “Many members have said that the pent-up demand in Japan has not yet taken place,” stated the BOJ Minute.
Moreover, it is much easier for students and business people to travel to Japan due to the Japanese yen. On the other hand, following his early surprise victory, Prime Minister Fumio Kishida’s budget has also been criticized.
GBP/JPY price technical analysis: Bearish pressure mounts after a range breakout
The GBP/JPY price remains heavily sold near the 155.00 handle. The pair broke the lower end of consolidation at 155.70 and fell sharply in the Asian session. Further downside pressure is likely to prevail as the volume data is bearish bias, and the key SMAs on the 4-hour chart also point at further losses. The downside target could be 200-period SMA at 153.50 area.
