GBP/JPY retreats from 2-week highs ahead of Brexit vote as pound slides

• GBP/JPY breaks to the downside, signals more losses ahead. 
• UK Parliament expected to vote on Brexit deal around 20:00 GMT; volatility likely to remain elevated. 

The GBP/JPY pair reversed sharply from the highest level in two weeks and dropped reaching the lowest since last Friday. The move to the downside took place amid a slide of the pound across the board ahead of crucial hours for Brexit and UK politics.

Earlier today, GBP/JPY reached at 140.40, the highest level since December 31. Shorty afterward turned to the downside and recently accelerated. From the top has lost almost two hundred pips. Recently, bottomed at 138.46 and as of writing trades at 138.60. The slide pushed the price below important intraday support levels and now it points to further weakness ahead of the critical Brexit vote. 

The UK House of Commons is expected to vote on the deal around 20:00 GMT.  May’s plan is likely to fail. A loss by a small margin leaves the door open for a second vote, but if a vast majority rejects the deal, a leadership challenge or a no-confidence vote might be called. Also, the future of the Brexit process will be unclear. PM May will deliver a statement after the vote takes place. 

GBP/JPY Levels to watch 

To the downside, support levels might be seen at 138.40, followed by 137.55/60 (Jan 7 & 11 low) and 137.05. On the upside, resistance might be located at 139.10, 139.90 and 140.40 (weekly high).