GBP/JPY capped below 139.00 amid growing Brexit fears

• GBP/JPY fails to returns above 139.00, remains steady above 137.55.
• Brexit uncertainty is weighing on GBP.
• The near-term upside momentum loses steam.

Sterling's upside attempts have lost steam right below 139.00 on Monday with Brexit woes keeping GBP longs in check. The pair remains supported above 137.55/60 barely changed on the day.

Brexit fears weigh on the pound

The cable has been unable to take advantage of the positive market sentiment on Monday and has been trading on a moderate negative tone against its main rivals. Market concerns about the lack of progress in the Brexit talks are weighing on pound demand, as fears of a “hard exit” from the EU start to take shape.

The talks have continued this week and the sentiment is moderately optimist about the chances of a trade deal. Time, however, is running off and the postures on key issues remain far apart.

Pound's upside momentum falters

Technical indicators show the pair slightly positive on an uptrend from late October lows at 134.45, yet turning neutral on daily charts. Initial support lies at 137.55 (November 13 low) and below there 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 (intra-day level) to regain bullish traction to test 140.30 (November 11 high) and trendline resistance from December 2019 highs, now at 141.00.

Technical levels to watch