GBP/JPY drops to two-month low

GBP/JPY dropped to two-month low of 137.01 in Asia on reports UK PM May, via her speech on Tuesday, is set to announce the government is prepared for hard Brexit.

Pound offered across the board

The British Pound was smacked across the board in early Asia. The sell-off is not surprising, given the heightened odds of hard Brexit. It was reported in the Sunday Times that Theresa May will finally lay her cards on the table and call for hard Brexit.

The resulting drop in the US index futures also strengthened the bid tone around the Japanese Yen.

GBP/JPY Technical Levels

The cross was last seen trading around 137.66 levels. A break above the immediate hurdle of 138.92 (Jan 12 low) would expose 139.35 (5-MA on 4-hr chart). A violation there could yield a rally to 140.00 (zero figure) levels. On the lower side, a breach of 137.01 (session low) would open the doors to 136.76 (Nov 16 high) and then to 136.00 (zero level).