Daily Analysis For GBP/JPY   12-06-2023

Daily Analysis For GBP/JPY 12-06-2023

GBP/JPY Analysis


Key Points: -

·       The GBP/JPY pair is maintaining modest gains, reaching its highest levels since January 2016.


·       Despite mixed concerns surrounding the UK's economic growth, sellers have been reluctant to enter the market as Bank of Japan (BoJ) officials continue to support an accommodative monetary policy.


·       In the bond markets, there is notable selling pressure ahead of the upcoming central bank decision.


·       The downbeat Japan Producer Price Index (PPI) data further reinforces the bullish bias for the pair, with market focus shifting towards the release of UK employment data and the BoJ's monetary policy meeting.


Today's Scenario: -


The GBP/JPY pair continues to advance for the fourth consecutive day, reaching its highest levels since early 2016 during the early hours of Monday's European session. This upward movement reflects the market's recognition of the diverging monetary policies between the Bank of England (BoE) and the Bank of Japan (BoJ). The pair's mild gains are supported by firmer bond yields and preparations for significant data releases and events scheduled for this week.


Despite hawkish concerns surrounding the BoE, recent comments from policymakers, such as Catherine Mann, suggest that the UK government needs a long-term agenda to safeguard growth prospects. Additionally, the Confederation of British Industry (CBI) trade body stated that while Britain's economy appears likely to avoid recession this year, persistent challenges such as weak business investment remain unresolved.


Diagram of GBP/JPY: -

Economic Events: -


Date      Event                                                                                         Impact             Currency

4:15      (New Zealand) Electronic Retail Card Spending YoY     Low      NZD

4:15      (New Zealand) Electronic Retail Card Spending MoM   Low      NZD

5:20      (Japan) PPI YoY                                                                             Low             JPY

5:20      (Japan) PPI MoM                                                             Low            JPY

5:31      (Ireland) Construction PMI                                              Low           EUR

10:30    (Finland) Current Account                                              Low           EUR

11:30    (Japan) Machine Tool Orders YoY                                 Low          JPY

12:30    (Slovakia) Construction Output YoY                               Low          EUR

13:30    (China) Total Social Financing                                                   Low            CNY

13:30    (China) New Yuan Loans                                                           Low  CNY

13:30    (China) M2 Money Supply YoY                                                   Low            CNY

13:30    (China) Outstanding Loan Growth YoY                                      Low          CNY

13:30    (Switzerland) Myfxbook USDCHF Sentiment       Medium        CHF

13:30    (Australia) Myfxbook AUDUSD Sentiment          Medium         AUD

13:30    (Japan) Myfxbook USDJPY Sentiment                                Medium         JPY

13:30    (European Union) Myfxbook EURUSD Sentiment            Medium         EUR

13:30    (United Kingdom) Myfxbook GBPUSD Sentiment           Medium         GBP

13:30    (Canada) Myfxbook USDCAD Sentiment                           Medium         CAD

13:30    (New Zealand) Myfxbook NZDUSD Sentiment                Medium          NZD

15:15    (European Union) EU Bond Auction                              Low           EUR

15:15    (European Union) 15-Year Bond Auction                                   Low           EUR

18:30    (Ecuador) Balance of Trade                                                        Low           USD

18:30    (France) 3-Month BTF Auction                                                  Low           EUR

18:30    (France) 12-Month BTF Auction                                                Low           EUR

18:30    (France) 6-Month BTF Auction                                                  Low           EUR

20:30    (Kosovo) Inflation Rate YoY                                                        Low           EUR

20:30    (United States) Consumer Inflation Expectations                 Low          USD

21:00    (United States) 6-Month Bill Auction                                         Low           USD

21:00    (United States) 3-Year Note Auction                                          Low           USD

22:30    (United States) 3-Month Bill Auction                                        Low           USD

22:30    (United States) 10-Year Note Auction                                        Low           USD

23:30    (United States) Monthly Budget Statement        Medium         USD



Buy Scenario: -


On the upside, the round figure of 180.00 and the September 2015 low near 180.30 act as barriers, restricting the pair's upward movements. Till we do not advise to buy GBP/JPY.


Sell Scenario: -


For the GBP/JPY pair, a daily close below the previous resistance line, which extends from early May and currently sits around 175.20, is crucial for a short-term pullback. However, sellers face a challenge in the form of the late 2022 peak around 173.00. Till we do not advise to sell GBP/JPY.


Support and Resistance Level: -

Support                Resistance  

 S1 174.57    -    R1 175.80

 S2 173.82   -     R2 176.29

 S3 173.33   -     R3 177.04




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