Published on May 12, 2023

Daily Analysis For GBP/JPY 12-05-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
04:00	(New Zealand) Business Inflation Expectations	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
06:00	(Finland) Current Account	Low	EUR
07:00	(United Kingdom) Goods Trade Balance	High	GBP
07:00	(United Kingdom) GDP YoY	Low	GBP
07:00	(United Kingdom) Goods Trade Balance Non-EU	High	GBP
07:00	(United Kingdom) Industrial Production MoM	Medium	GBP
07:00	(United Kingdom) Industrial Production YoY	Low	GBP
07:00	(United Kingdom) Manufacturing Production MoM	Medium	GBP
07:00	(United Kingdom) Manufacturing Production YoY	Low	GBP
07:00	(United Kingdom) Construction Output YoY	Low	GBP
07:00	(United Kingdom) Balance of Trade	Low	GBP
07:00	(United Kingdom) GDP Growth Rate YoY	High	GBP
07:00	(United Kingdom) GDP Growth Rate QoQ	High	GBP
07:00	(United Kingdom) Business Investment QoQ	Medium	GBP
07:00	(United Kingdom) Business Investment YoY	Low	GBP
07:00	(United Kingdom) GDP MoM	High	GBP
07:00	(United Kingdom) GDP 3-Month Avg	Medium	GBP
07:00	(United Kingdom) Construction Orders YoY	Low	GBP
07:45	(France) Inflation Rate YoY	Medium	EUR
07:45	(France) Inflation Rate MoM	Medium	EUR
07:45	(France) Harmonised Inflation Rate MoM	Low	EUR
07:45	(France) Harmonised Inflation Rate YoY	Low	EUR
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Spain) CPI	High	EUR
08:00	(Spain) Core Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate MoM	Low	EUR
08:00	(Spain) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Spain) Harmonised Inflation Rate MoM	Low	EUR
08:00	(United States) Fed Bowman Speech	Medium	USD
09:00	(Euro Area) ECB Guindos Speech	High	EUR
10:00	(China) Current Account	Medium	CNY
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Current Account	Low	EUR
12:15	(United Kingdom) BoE Pill Speech	Medium	GBP
13:00	(United Kingdom) NIESR Monthly GDP Tracker	Low	GBP
13:30	(United States) Export Prices YoY	Low	USD
13:30	(United States) Import Prices YoY	Low	USD
13:30	(United States) Import Prices MoM	Medium	USD
13:30	(United States) Export Prices MoM	Medium	USD
13:45	(Germany) Current Account	Low	EUR
14:00	(Ecuador) Balance of Trade	Low	USD
15:00	(United States) Michigan Consumer Sentiment	High	USD
15:00	(United States) Michigan Inflation Expectations	Low	USD
15:00	(United States) Michigan Consumer Expectations	Low	USD
15:00	(United States) Michigan 5 Year Inflation Expectations	Low	USD
15:00	(United States) Michigan Current Conditions	Low	USD
15:30	(Canada) Senior Loan Officer Survey	Medium	CAD
17:00	(United States) WASDE Report	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD

Today's Scenario: - GBP/JPY continues its decline for the second consecutive day following the Bank of England's (BoE) decision to raise interest rates by 25 basis points, signaling the possibility of additional tightening measures. During the meeting, the BoE also revised its economic forecasts and adopted a "hawkish" tone. However, these developments failed to provide sustained support for the Pound Sterling (GBP). As the Asian session commences, GBP/JPY is trading at 168.33, having experienced a 0.76% loss on Thursday.

Buy Scenario: - GBP/JPY maintains an upward bias and has found support at the 20-day Exponential Moving Average (EMA) around 168.32, which was tested multiple times during Thursday's trading session. The pair briefly dipped below the April 19 daily high, which has now turned into a support level at 167.97, and this level saw strong buying interest.

Despite experiencing two consecutive days of losses amounting to 1.50%, the Relative Strength Index (RSI) indicator remains in bullish territory, albeit with a flat slope. The 3-day Rate of Change (RoC) indicator suggests a neutral outlook after displaying consecutive negative readings.

If GBP/JPY manages to stay above 168.30, it could pave the way for further upside momentum. The next resistance level to watch would be the daily high from December 13 at 169.27, followed by the significant psychological level of 170.00. Till we do not advise to buy GBP/JPY.

Sell Scenario: - In the event that GBP/JPY falls below 168.00, sellers may find support at that level, potentially leading to a decline towards the support-turned-resistance level at 167.01, which was previously the high on December 20. If this support level is breached, the pair could test the support level at 166.00, which corresponds to the high from February 28. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -