GBP/JPY: stuck between key MAs ahead of Brexit vote

• The GBP/JPY pair is trading between the 50-candle exponential moving average (EMA) and the 100-candle EMA, according to the 4-hour chart.
• UK's Prime Minister Theresa May faces crushing defeat the meaningful vote on the Brexit deal on Tuesday evening.
• Sterling could find bids if the motion is rejected by a slim vote or is actually approved by the parliament.

The GBP/JPY pair is currently trading at 139.50, representing a 0.3 percent gain on the day, having failed to penetrate the 4-hour 100-candle MA hurdle yesterday.

At press time, the 50-candle EMA and the 100-candle EMA are located at 138.87 and 139.83, respectively.           

Sterling could rise well above 150.00 if the Brexit deal vote is rejected by a slim majority or is surprisingly approved, contrary to widespread expectation that a crushing defeat is in the offing for PM May. After all, almost every faction of the parliament has pledged to vote it down.  

Moreover, the market expects the vote to be shot down by a historically large margin, with some defeat estimates ranging as high as 200. As a result, that outcome should be priced in.  

That said, a big defeat could embolden the opposition Labour party to call early elections, in which case, Sterling could feel the pull of gravity.

The UK House of Commons is expected to vote on the Brexit deal between 1900-2100 GMT.

GBP/JPY Technical Levels