Published on Apr 18, 2023

Daily Analysis For GBP/JPY 18-04-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Cyprus) Orthodox Easter Tuesday	None	EUR
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Industrial Capacity Utilization	Low	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
03:00	(China) GDP Growth Rate YoY	High	CNY
03:00	(China) GDP Growth Rate QoQ	Medium	CNY
03:00	(China) Unemployment Rate	High	CNY
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) HMRC Payrolls Change	Low	GBP
09:00	(Italy) Balance of Trade	Medium	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(United Kingdom) 30-Year Treasury Gilt Auction	Low	GBP
11:00	(Ireland) Balance of Trade	Low	EUR
13:30	(Canada) New Motor Vehicle Sales	Low	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(United States) Housing Starts	Medium	USD
13:30	(United States) Building Permits	High	USD
13:30	(United States) Housing Starts MoM	Medium	USD
13:30	(United States) Building Permits MoM	Medium	USD
13:55	(United States) Redbook YoY	Low	USD
14:00	(Ecuador) Balance of Trade	Low	USD
14:00	(Euro Area) ECB Elderson Speech	Low	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
18:00	(United States) Fed Bowman Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - As Tuesday's London open approaches, buyers of the GBP/JPY currency pair are having a tough time maintaining control, as they attempt to break through a crucial resistance level near 166.50 in the short term. The current situation reflects the nervousness among traders, as they await the release of the UK's Claimant Count figures for March and the ILO Unemployment Rate for the three months up to February.

It is evident that the market is apprehensive about the upcoming economic data releases, which are expected to impact the performance of the GBP/JPY pair in the short term. The cross-currency pair is struggling to hold its ground, as buyers face resistance from the prevailing bearish sentiment.

The GBP/JPY's recent trend suggests that there may be further downward pressure on the currency pair if the upcoming data releases do not meet market expectations. It remains to be seen whether buyers will be able to overcome the current resistance level and drive the price higher.

Buy Scenario: - GBP/JPY buyers are facing a double challenge as they await key UK data. Firstly, an upward-sloping resistance line from late February, which currently sits around 166.50, is causing difficulty. Secondly, the RSI (14) line is approaching overbought levels.

Even if the pair manages to break through this trend line, it will require positive UK jobs data to aim for the December 2022 peak of around 169.30. After that, the psychological level of 170.00 could pose a challenge for buyers, followed by the October 2022 high around 172.15. Till we do not advise to buy GBP/JPY.

Sell Scenario: - On the downside, the 10-day moving average (DMA) level near 165.40 is acting as a support for GBP/JPY prices. If the short-term bears manage to break through this level, their target would be the monthly low of 162.90. However, sellers should remain cautious unless the quote stays below the support confluence of 161.00, which encompasses the previous resistance line from October 2022 and an upward-sloping support line from last September.

In summary, the GBP/JPY pair is facing significant challenges, and the upcoming UK data release will likely determine its short-term direction. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -