GBP/JPY remains sidelined above 155.00 on downbeat US T-bond yields, UK jobs eyed
- GBP/JPY edges higher following the strongest run-up in 13 days.
- Market sentiment dwindles amid pre-Fed caution, US Treasury yields snap two-day recovery.
- UK employment report, risk catalysts will be in focus ahead of Wednesday’s FOMC.
GBP/JPY bulls take a breather around 155.30 during a calmer Asian session on Tuesday. The cross-currency pair jumped the most since May 27 the previous day amid broad recovery moves of the US Treasury yields. In doing so, the quote ignored the covid and political crisis in Japan as well as the UK.
With British PM Boris Johnson’s official confirmation of a four-week delay to the unlock, markets take the Delta variant risk seriously of late. Also negative for the pair could be French and the European Union’s (EU) warning to the UK if it alters the previously agreed Brexit terms for the Northern Ireland (NI) border.
On the other hand, local protests against Olympics in Japan and chatters over a snap election also weigh on the market sentiment, as well as on the GBP/JPY prices.
Above all, traders’ indecision ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting weighs on the mood.
Amid these plays, S&P 500 Futures print mild gains but the US 10-year Treasury yields snap two-day uptrend to drop 1.4 basis points to 1.487% by the press time.
Moving on, expected strong prints of the UK’s employment data could renew talks over the BOE’s tapering and may fill fresh life into the quote. However, uncertainty over the Fed’s next move could probe the short-term upside of the GBP/JPY prices.
Technical analysis
Although a descending resistance line from May 28 tests GBP/JPY buyers around 155.35-40, the pair sellers may not risk entries until the quote stay beyond a six-month-old upward sloping support line near 154.50-45.