Published on Apr 17, 2023

Daily Analysis For GBP/JPY 17-04-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Cyprus) Orthodox Easter Monday	None	EUR
01:00	(Greece) Orthodox Easter Monday	None	EUR
01:00	(Montenegro) Orthodox Easter Monday	None	EUR
01:01	(Ireland) Construction PMI	Low	EUR
02:30	(China) PBoC 1-Year MLF Announcement	Low	CNY
08:30	(Euro Area) ECB McCaul Speech	Low	EUR
09:00	(Italy) Harmonised Inflation Rate YoY	Low	EUR
09:00	(Italy) Inflation Rate YoY	Medium	EUR
09:00	(Italy) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Inflation Rate MoM	Low	EUR
09:00	(Italy) CPI	High	EUR
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Euro Area) ECB Tuominen Speech	Low	EUR
10:30	(Germany) 12-Month Bubill Auction	Low	EUR
10:45	(European Union) EU Bond Auction	Low	EUR
10:45	(European Union) 10-Year Bond Auction	Low	EUR
11:00	(Slovakia) Unemployment Rate	Low	EUR
13:30	(Canada) Wholesale Sales MoM	Low	CAD
13:30	(Canada) Foreign Securities Purchases by Canadians	Low	CAD
13:30	(Canada) Foreign Securities Purchases	Low	CAD
13:30	(United States) NY Empire State Manufacturing Index	Medium	USD
14:00	(Belgium) Balance of Trade	Low	EUR
14:00	(France) 3-Month BTF Auction	Low	EUR
14:00	(France) 12-Month BTF Auction	Low	EUR
14:00	(France) 6-Month BTF Auction	Low	EUR
14:00	(United Kingdom) BoE Cunliffe Speech	Low	GBP
15:00	(United States) NAHB Housing Market Index	Medium	USD
16:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
21:00	(United States) Foreign Bond Investment	Low	USD
21:00	(United States) Net Long-term TIC Flows	Medium	USD
21:00	(United States) Overall Net Capital Flows	Low	USD

Today's Scenario: - GBP/JPY is currently trading around 166.40 and is showing a slight bullish bias. However, the pair is struggling to maintain its four-day uptrend within a short-term rising wedge chart pattern, which is typically a bearish signal.

Moreover, the bearish Moving Average Convergence Divergence (MACD) signals, along with the pair's downward break of an upward-sloping support line from late March, which is now acting as immediate resistance at around 166.80, strengthens the bearish sentiment for the pair.

Buy Scenario: - The GBP/JPY pair has shown signs of exhaustion in its upward momentum after breaking through a prior resistance level at 166.40, which has caused concerns about a possible reversal. The cross has been trading in a range between 165.40 and 166.85, suggesting that institutional investors may be distributing their inventory to retail participants.

Conversely, if the cross moves higher and breaks through the April 13 high at 166.85, it could drive the asset up towards the December 16 high at 168.00, followed by the December 15 high at 168.78. Till we do not advise to buy GBP/JPY.

Sell Scenario: - the pair needs to break the previous support line at 166.80 for intraday buyers to gain confidence. If successful, the top line of the wedge and the recent high near 167.00 may provide resistance before defying the bearish chart formation. In such a scenario, the pair may rise towards the late 2022 peak of around 169.30 and the 170.00 round figure.

Overall, GBP/JPY buyers seem to be losing momentum ahead of the UK's key data week. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -