Published on May 17, 2023

Daily Analysis For GBP/JPY 17-05-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
00:00	(United States) Fed Bostic Speech	Medium	USD
00:50	(Japan) GDP Price Index YoY	Low	JPY
00:50	(Japan) GDP Capital Expenditure QoQ	Low	JPY
00:50	(Japan) GDP External Demand QoQ	Low	JPY
00:50	(Japan) GDP Private Consumption QoQ	Low	JPY
00:50	(Japan) GDP Growth Rate QoQ	High	JPY
00:50	(Japan) GDP Growth Annualized	High	JPY
02:30	(Australia) Wage Price Index QoQ	Low	AUD
02:30	(Australia) Wage Price Index YoY	Low	AUD
02:30	(China) House Price Index YoY	Medium	CNY
04:35	(Japan) 20-Year JGB Auction	Low	JPY
05:30	(Japan) Capacity Utilization MoM	Low	JPY
05:30	(Japan) Industrial Production MoM	Low	JPY
05:30	(Japan) Industrial Production YoY	Low	JPY
05:30	(Netherlands) Unemployment Rate	Medium	EUR
06:30	(France) Unemployment Rate	Medium	EUR
07:00	(European Union) New Car Registrations YoY	Medium	EUR
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Austria) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Austria) Harmonised Inflation Rate MoM	Low	EUR
08:00	(Austria) Inflation Rate MoM	Low	EUR
08:00	(Austria) Inflation Rate YoY	Low	EUR
08:00	(Austria) CPI	High	EUR
08:00	(Slovakia) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Slovakia) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Balance of Trade	Medium	EUR
10:00	(Cyprus) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Euro Area) Inflation Rate MoM	Low	EUR
10:00	(Euro Area) Core Inflation Rate YoY	Low	EUR
10:00	(Euro Area) Inflation Rate YoY	Medium	EUR
10:00	(Euro Area) CPI	High	EUR
10:00	(France) 5-Year OAT Auction	Low	EUR
10:00	(France) 3-Year OAT Auction	Low	EUR
10:00	(Malta) Inflation Rate YoY	Low	EUR
10:00	(Euro Area) ECB Elderson Speech	Low	EUR
10:30	(Germany) 10-Year Bund Auction	Medium	EUR
10:30	(Euro Area) ECB Panetta Speech	Low	EUR
10:50	(United Kingdom) BoE Gov Bailey Speech	Medium	GBP
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Ireland) Residential Property Prices MoM	Low	EUR
11:00	(Ireland) Residential Property Prices YoY	Low	EUR
11:00	(France) 10-Year Index-Linked OAT Auction	Low	EUR
11:00	(Ireland) Balance of Trade	Low	EUR
11:10	(European Union) 3-Month Bill Auction	Low	EUR
11:10	(European Union) 6-Month Bill Auction	Low	EUR
11:30	(United Kingdom) 5-Year Treasury Gilt Auction	Low	GBP
12:00	(United States) MBA 30-Year Mortgage Rate	Medium	USD
12:00	(United States) MBA Mortgage Applications	Low	USD
12:00	(United States) MBA Mortgage Refinance Index	Low	USD
12:00	(United States) MBA Mortgage Market Index	Low	USD
12:00	(United States) MBA Purchase Index	Low	USD
13:30	(Canada) New Motor Vehicle Sales	Low	CAD
13:30	(Canada) Foreign Securities Purchases by Canadians	Low	CAD
13:30	(Canada) Foreign Securities Purchases	Low	CAD
13:30	(United States) Building Permits MoM	Medium	USD
13:30	(United States) Housing Starts MoM	Medium	USD
13:30	(United States) Housing Starts	Medium	USD
13:30	(United States) Building Permits	High	USD
15:30	(United States) EIA Refinery Crude Runs Change	Low	USD
15:30	(United States) EIA Crude Oil Stocks Change	Medium	USD
15:30	(United States) EIA Distillate Stocks Change	Low	USD
15:30	(United States) EIA Heating Oil Stocks Change	Low	USD
15:30	(United States) EIA Gasoline Production Change	Low	USD
15:30	(United States) EIA Crude Oil Imports Change	Low	USD
15:30	(United States) EIA Gasoline Stocks Change	Medium	USD
15:30	(United States) EIA Cushing Crude Oil Stocks Change	Low	USD
15:30	(United States) EIA Distillate Fuel Production Change	Low	USD
16:15	(Euro Area) ECB Guindos Speech	High	EUR
16:30	(United States) 17-Week Bill Auction	Low	USD
17:00	(Canada) 3-Year Bond Auction	Low	CAD
18:00	(United States) 20-Year Bond Auction	Low	USD
23:45	(New Zealand) PPI Input QoQ	Low	NZD
23:45	(New Zealand) PPI Output QoQ	Low	NZD

Today's Scenario: - GBP/JPY is currently facing pressure around 170.25 as it continues its reversal from a one-week high reached on the previous day. This price action aligns with the positive growth numbers reported in Japan. The pair is also maintaining the pullback that began on Tuesday from a descending resistance line established since May 1.

The preliminary reading for Japan's Gross Domestic Product (GDP) in the first quarter of 2023 revealed a 0.4% quarter-on-quarter (QoQ) increase, surpassing expectations of 0.1% and the previous figure of 0.0%.

Buy Scenario: - If there is a recovery in the pair, the aforementioned monthly resistance line around 170.60 will be the initial target, followed by a challenge of a previously upward-sloping support line that has been in place for seven weeks, located near 170.90. Further upside potential could lead GBP/JPY towards the monthly peak of 172.35. Till we do not advise to buy GBP/JPY.

Sell Scenario: - Considering the positive data from Japan and the reversal of GBP/JPY from a significant resistance line, coupled with a stronger Relative Strength Index (RSI) with a period of 14, it is likely that the pair will experience further downward movement.

However, the downside could be limited in the short term by a convergence of the 50-period Simple Moving Average (SMA) and an ascending trend line that has been in place for the past week, currently around 169.90.

If the pair continues to decline, the double tops formed in late April around 168.00, as well as the current monthly resistance, could provide additional resistance for sellers. It is worth noting that the 200-period SMA around 167.50 acts as the final line of defense for GBP/JPY buyers. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -