Daily Analysis For GBP/JPY 03-05-2023

Daily Analysis For GBP/JPY 03-05-2023

GBP/JPY Analysis
GBP/JPY
Economic Events and Scenario for GBP/JPY
Economic Events : -
GMTEventImpactCurrency
00:00(Australia) Ai Group Industry IndexMediumAUD
00:00(Australia) Judo Bank Services PMIHighAUD
00:00(Australia) Judo Bank Composite PMILowAUD
00:00(Australia) Ai Group Construction IndexLowAUD
00:00(Australia) Ai Group Manufacturing IndexLowAUD
01:00(China) May DayNoneCNY
01:00(Japan) Constitution Memorial DayNoneJPY
02:30(Australia) Retail Sales MoMHighAUD
02:30(Australia) RBA Chart PackLowAUD
07:45(France) Budget BalanceLowEUR
09:00(Italy) Unemployment RateHighEUR
10:00(Cyprus) Unemployment RateLowEUR
10:00(Euro Area) Unemployment RateHighEUR
10:00(France) New Car Registrations YoYLowEUR
10:00(United Kingdom) 2-Year Treasury Gilt AuctionLowGBP
10:30(Germany) 7-Year Bund AuctionLowEUR
11:00(Belgium) New Car Registrations YoYLowEUR
11:00(Portugal) Industrial Production YoYLowEUR
11:00(Portugal) Industrial Production MoMLowEUR
11:10(European Union) 6-Month Bill AuctionLowEUR
11:10(European Union) 3-Month Bill AuctionLowEUR
11:30(Portugal) Budget BalanceLowEUR
12:00(United States) MBA 30-Year Mortgage RateMediumUSD
12:00(United States) MBA Mortgage ApplicationsLowUSD
12:00(United States) MBA Mortgage Refinance IndexLowUSD
12:00(United States) MBA Mortgage Market IndexLowUSD
12:00(United States) MBA Purchase IndexLowUSD
12:30(Germany) New Car Registrations YoYLowEUR
13:15(United States) ADP Employment ChangeHighUSD
14:30(United States) Treasury Refunding AnnouncementLowUSD
14:45(United States) S&P Global Composite PMIMediumUSD
14:45(United States) S&P Global Services PMIHighUSD
15:00(United States) ISM Non-Manufacturing PricesLowUSD
15:00(United States) ISM Non-Manufacturing New OrdersLowUSD
15:00(United States) ISM Non-Manufacturing EmploymentMediumUSD
15:00(United States) ISM Non-Manufacturing PMIHighUSD
15:00(United States) ISM Non-Manufacturing Business ActivityLowUSD
15:00(United States) Total Vehicle SalesLowUSD
15:30(United States) EIA Refinery Crude Runs ChangeLowUSD
15:30(United States) EIA Crude Oil Stocks ChangeMediumUSD
15:30(United States) EIA Distillate Stocks ChangeLowUSD
15:30(United States) EIA Heating Oil Stocks ChangeLowUSD
15:30(United States) EIA Gasoline Production ChangeLowUSD
15:30(United States) EIA Crude Oil Imports ChangeLowUSD
15:30(United States) EIA Gasoline Stocks ChangeMediumUSD
15:30(United States) EIA Cushing Crude Oil Stocks ChangeLowUSD
15:30(United States) EIA Distillate Fuel Production ChangeLowUSD
16:30(United States) 17-Week Bill AuctionLowUSD
19:00(United States) Fed Interest Rate DecisionHighUSD
19:30(United States) Fed Press ConferenceHighUSD
23:45(New Zealand) Building Permits MoMLowNZD
Today's Scenario: - GBP/JPY pair attempted to rally but faced resistance and gave back some of its gains, showing signs of hesitation. This is not unexpected given the overextended nature of the market and the fact that it is facing a major resistance barrier in the form of a previous high. However, it is possible that the market may eventually break above this resistance level.
The British pound has been performing well recently due to high inflation in the United Kingdom, and it is likely that this trend will continue. In contrast, the Bank of Japan's yield curve control policy is keeping interest rates low, with the 10-year Japanese bond offering only 50 basis points or less. This divergence in inflation and interest rates between the two countries is contributing to the GBP/JPY's upward momentum.
Buy Scenario: - In the long term, a breakout above the 173 level could lead to a move towards the 175 level. However, it's important to wait for confirmation of such a breakout before making any significant trades. Till we do not advise to buy GBP/JPY.
Sell Scenario: - Based on the current market conditions, it seems like a good strategy to buy short-term pullbacks in the GBP/JPY pair. The market may find support around the 170 level, as it is a key psychological level. If the market continues to pull back, the 168 level may also provide support, as it was a previous resistance level and may have some market memory attached to it.
It's important to note that shorting this pair does not seem like a viable option as the British pound is currently strong due to high inflation in the UK, while the Bank of Japan's yield curve control policy is keeping interest rates low in Japan. This means that there are several factors working against the Japanese yen, making it difficult for it to appreciate. Till we do not advise to sell GBP/JPY.
Support and Resistance Level: -
SupportResistance
S1 169.37-R1 171.75
S2 168.47-R2 173.23
S3 166.99-R3 174.13

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