GBP/JPY hits two-week highs in Asia

• The GBP picks up an early bid on Brexit optimism
• Early gains were short-lived as a deal is far from certain, according to the Irish Times.

The GBP/JPY gapped higher in early Asian on reports that Prime Minister May has secured a "secret" Brexit deal.

The Sunday Times reported yesterday that under the plans devised by May and the EU negotiators, the whole of the UK would effectively remain within a customs union with the bloc after Brexit. More importantly, the report said that May's plans are likely to appease Conservatives Party and some labour MPs.

However, the early jump in GBP was short-lived, possibly due to reports by the Irish Times stating that a backstop agreement may be close but a deal is far from certain.

At press time, the GBP/JPY is trading at 147.20, having clocked an intraday low of 147.08 a few minutes before press time.

The British and European Union negotiators are set to resume their talks today but will enter a "tunnel" -  a mutually agreed shutdown of external comment, which is supposed to facilitate their work.

The pair may climb the highs seen in early Asia if equities put on a good show, weakening the bid tone around the anti-risk JPY.

GBP/JPY Technical Levels

Resistance: 147.58 (Oct. 22 high), 148.00 (psychological hurdle), 148.30 (resistance of trendline connecting the Sept. 21 high and Oct. 10 high)

Support: 146.77 (200-day EMA), 146.08 (5-day EMA), 145.75 (10-day EMA)