- GBP / JPY fails to return above 139.00, it remains stable above 137.55.
- Brexit uncertainty is weighing on the British pound.
- Short-term bullish momentum loses steam.
Sterling’s higher attempts have lost steam just below 139.00 on Monday with Brexit troubles keeping sterling longs in check. The pair remains supported above 137.55 / 60 barely changed on the day.
Brexit fears weigh on the pound
The pound has been unable to take advantage of positive market sentiment on Monday and has been trading in a moderate negative tone against its main rivals. Market concerns over a lack of progress in the Brexit negotiations are weighing on demand for the pound, as fears of a “hard exit” from the EU begin to take shape.
Talks have continued this week and sentiment is moderately optimistic about the chances of a trade deal. However, time is running out and positions on key issues remain widely separated.
Pound’s bullish momentum falters
Technical indicators show the pair slightly positive in an uptrend from late October lows at 134.45, but turning neutral on the daily charts. Initial support is at 137.55 (Nov 13 low) and below there the next areas of relevance would be the 100-day SMA at 137.00 and the 50-day SMA at 136.35.
On the upside, the pair should break above 138.85 (intraday level) to regain bullish traction and test 140.30 (November 11 high) and trend line resistance from December 2019 highs, now at 141.00.
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