GBP/JPY ignores Brexit uncertainty amid trade-backed risk-on

• GBP/JPY sellers catch a breath as trade-positive comments from the US supersede Brexit uncertainty.
• Chinese Vice Premier will visit the US next week, China committed to buy more of the US farm products.
• UK PM Johnson refuses to step down if the Supreme court rules against prorogation, shows readiness to prorogue the parliament again if failed.

Despite witnessing headlines creating much of the Brexit noise, GBP/JPY manages to stop its two-day-old declines while making the rounds to 133.75 during early Tuesday morning in Asia.

Not only the US-side statements for the Chinese Vice Premier’s visit and the dragon nation’s commitment to buy more agricultural products from the US, but the UK PM Boris Johnson’s upbeat comments to welcome the US and Canadian business post-Brexit also buoyed investor sentiment amid initial Tuesday trading.

With this, market risk-sentiment turn positive with Gold extending pullback and S&P 500 Futures rise farther in the positive territory. Further, the US 10-year Treasury yields also mark 1.5 basis points (bps) of gains to 1.722% by the press time.

Optimists ignore increasing odds of a no-deal Brexit after the UK PM’s meeting with the EU President failed to deliver any breakthrough. Also adding to the uncertainty is the PM Johnson’s refrain from stepping down if at all he loses the Supreme Court case against proroguing the Parliament. Moreover, The Sun also noted that Mr. Johnson showed readiness to again prorogue the Parliament if failed.

While political headlines from the United Nation’s General Assembly will keep markets active, pair traders will closely observe the UK Supreme Court’s ruling on the case against the PM Johnson’s prorogation of the Parliaments. If the decision comes against the Tory leader, odds of a soft Brexit will increase as the same could allow the Members of the Parliaments (MPs) to work upon the departure issues.

Technical Analysis

Pair’s sustained trading below 10-day simple moving average (SMA) level of 134.30 signals gradual declines towards 21-day SMA level around 132.20. During pair’s further south-run, August 22 high near 130.70 and 130.00 will becomes bear’s favorites. On the contrary, monthly top nearing 135.80 could question buyers past-134.30.