Published on May 16, 2023

Daily Analysis For GBP/JPY 16-05-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
01:30	(Australia) Westpac Consumer Confidence Index	High	AUD
01:30	(Australia) Westpac Consumer Confidence Change	High	AUD
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Unemployment Rate	High	CNY
03:00	(China) Retail Sales YoY	High	CNY
03:00	(China) Industrial Production YoY	High	CNY
03:00	(China) Fixed Asset Investment (YTD) YoY	Medium	CNY
06:00	(Finland) GDP YoY	Low	EUR
06:00	(Finland) GDP Growth Rate QoQ	Low	EUR
06:00	(Finland) GDP Growth Rate YoY	Low	EUR
07:00	(United Kingdom) HMRC Payrolls Change	Low	GBP
07:00	(United Kingdom) Average Earnings excl. Bonus (3Mo/Yr)	Low	GBP
07:00	(United Kingdom) Average Earnings incl. Bonus (3Mo/Yr)	Medium	GBP
07:00	(United Kingdom) Unemployment Rate	High	GBP
07:00	(United Kingdom) Claimant Count Change	High	GBP
07:00	(United Kingdom) Employment Change	High	GBP
07:00	(United Kingdom) Labour Productivity QoQ	Low	GBP
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Slovakia) GDP Growth Rate YoY	Low	EUR
08:00	(Slovakia) GDP Growth Rate QoQ	Low	EUR
08:30	(Netherlands) Household Consumption YoY	Low	EUR
08:30	(Netherlands) GDP Growth Rate QoQ	Medium	EUR
08:30	(Netherlands) GDP Growth Rate YoY	Medium	EUR
08:30	(Netherlands) Balance of Trade	Low	EUR
09:00	(European Union) ECOFIN Meeting	Medium	EUR
09:00	(France) IEA Oil Market Report	Medium	EUR
09:00	(Italy) Inflation Rate MoM	Low	EUR
09:00	(Italy) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Inflation Rate YoY	Medium	EUR
09:00	(Italy) Harmonised Inflation Rate YoY	Low	EUR
09:00	(Italy) CPI	High	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(Cyprus) GDP Growth Rate YoY	Low	EUR
10:00	(Cyprus) GDP Growth Rate QoQ	Low	EUR
10:00	(Euro Area) GDP Growth Rate YoY	Medium	EUR
10:00	(Euro Area) GDP Growth Rate QoQ	Medium	EUR
10:00	(Euro Area) Employment Change QoQ	High	EUR
10:00	(Euro Area) Employment Change YoY	High	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(Montenegro) Inflation Rate MoM	Low	EUR
10:00	(Montenegro) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Montenegro) Inflation Rate YoY	Low	EUR
13:15	(United States) Fed Mester Speech	Medium	USD
13:30	(Canada) Manufacturing Sales MoM	Low	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(United States) Retail Sales Ex Gas/Autos MoM	High	USD
13:30	(United States) Retail Sales YoY	High	USD
13:30	(United States) Retail Sales Ex Autos MoM	High	USD
13:30	(United States) Retail Sales MoM	High	USD
13:55	(United States) Redbook YoY	Low	USD
13:55	(United States) Fed Bostic Speech	Medium	USD
14:15	(United States) Manufacturing Production MoM	Low	USD
14:15	(United States) Industrial Production MoM	Medium	USD
14:15	(United States) Industrial Production YoY	Medium	USD
14:15	(United States) Manufacturing Production YoY	Low	USD
14:15	(United States) Capacity Utilization	Low	USD
14:45	(Euro Area) ECB Tuominen Speech	Low	EUR
15:00	(United States) Retail Inventories Ex Autos MoM	Low	USD
15:00	(United States) Business Inventories MoM	Medium	USD
15:00	(United States) NAHB Housing Market Index	Medium	USD
15:00	(United States) Fed Barr Testimony	Medium	USD
15:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
17:15	(United States) Fed Williams Speech	Medium	USD
20:15	(United States) Fed Logan Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - Following the formation of a bullish-harami candlestick pattern on Friday, the GBP/JPY pair has registered consecutive gains, which were further affirmed by Monday's price movement. Initially, the GBP/JPY pair dropped to a low of 168.86 but quickly rebounded, surging towards 170.49. As of the current writing, the GBP/JPY pair is trading at 170.47.

Buy Scenario: - Starting from the final days of April, the GBP/JPY pair began forming a falling wedge pattern, which subsequently transformed into a double bottom chart pattern on the daily chart. The pair reached a low point around 167.84 and briefly dipped below the 20-day Exponential Moving Average (EMA) at 168.76 before recovering and climbing back towards the 170.00 level.

To continue its ascent, the GBP/JPY pair needs to overcome a resistance trendline that has been in place for the past two weeks, around the 170.30/50 region. Once this hurdle is cleared, the pair will set its sights on the year-to-date (YTD) high at 172.33. However, there are additional resistance levels to surpass along the way. The first supply zone lies at the May 10 daily high of 171.17. A breach of this level would expose the high from last year at 172.13, followed by the YTD high at 172.33.Till we do not advise to buy GBP/JPY.

Sell Scenario: - Conversely, if the GBP/JPY pair drops below the 170.00 mark, it could experience a pullback towards the support-turned-resistance level at 169.27, which was the daily high on December 13. Further downside support can be found at the 20-day EMA around 168.75. In the event of further decline, downside risks lie at the 168.00 level before testing the 167.50 area.

Based on the Relative Strength Index (RSI) indicator, there is room for further upside momentum, and the 3-day Rate of Change (RoC) suggests that the GBP/JPY pair may undergo another upward movement as it aims to test the YTD high. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -