Published on Mar 20, 2023

Daily Analysis For GBP/JPY 20-03-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT		Event	Currency
06:00	-	(Estonia) PPI MoM	EUR
06:00	-	(Estonia) PPI YoY	EUR
07:00	-	(Germany) PPI YoY	EUR
07:00	-	(Germany) PPI MoM	EUR
08:00	-	(Switzerland) Myfxbook USDCHF Sentiment	CHF
08:00	-	(Australia) Myfxbook AUDUSD Sentiment	AUD
08:00	-	(Japan) Myfxbook USDJPY Sentiment	JPY
08:00	-	(European Union) Myfxbook EURUSD Sentiment	EUR
08:00	-	(United Kingdom) Myfxbook GBPUSD Sentiment	GBP
08:00	-	(Canada) Myfxbook USDCAD Sentiment	CAD
08:00	-	(New Zealand) Myfxbook NZDUSD Sentiment	NZD
10:00	-	(Euro Area) Balance of Trade	EUR
10:00	-	(Slovakia) Unemployment Rate	EUR
10:30	-	(Germany) 12-Month Bubill Auction	EUR
10:45	-	(European Union) EU Bond Auction	EUR
10:45	-	(European Union) 10-Year Bond Auction	EUR
11:00	-	(Luxembourg) Unemployment Rate	EUR
12:30	-	(Canada) New Motor Vehicle Sales	CAD
14:00	-	(France) 3-Month BTF Auction	EUR
14:00	-	(France) 12-Month BTF Auction	EUR
14:00	-	(France) 6-Month BTF Auction	EUR
14:00	-	(Euro Area) ECB President Lagarde Speech	EUR
15:30	-	(United States) 3-Month Bill Auction	USD
15:30	-	(United States) 6-Month Bill Auction	USD
16:00	-	(Canada) 5-Year Bond Auction	CAD
16:00	-	(Euro Area) ECB President Lagarde Speech	EUR
17:00	-	(El Salvador) Balance of Trade	USD
21:45	-	(New Zealand) Exports	NZD
21:45	-	(New Zealand) Imports	NZD
21:45	-	(New Zealand) Balance of Trade	NZD

Today's Scenario: - During the early hours of Monday's Asian session, GBP/JPY advanced as the demand for the Japanese Yen weakened in light of growing optimism about liquidity. The risk appetite was boosted due to a global effort to alleviate the liquidity crisis that occurred last week.

To restore confidence in the financial system, several major central banks, such as the Bank of Japan (BoJ) and the Bank of England (BoE), have collaborated in an attempt to provide US Dollars to the banking ecosystem worldwide. A swap line has been introduced for this purpose.

Buy Scenario: - The GBP/JPY pair has faced resistance at the 38.2% Fibonacci retracement level of the downtrend from 172.10 to 155.34, around 161.75. However, technical indicators suggest a lack of bullish momentum, with the MACD easing below its signal line, the RSI dropping below 50, and the Stochastic oscillator preparing for a downside reversal.

Further resistance could be found in the 162.75-163.70 area, which includes the resistance trendline from the October high of 172.10, the 20- and 200-day simple moving averages, and the 50% Fibonacci level. If the pair breaks through this area, the bulls could gain momentum and push towards the upper boundary of the channel at 165.60, with potential targets at the 61.8% Fibonacci level of 166.75 and the 167.00 mark. Till we do not advise to buy GBP/JPY.

Sell Scenario: - If the GBP/JPY pair fails to break above the 161.75 resistance level, it may experience a bearish channel breakout, leading to a decline towards 160.80. This could then cause further selling pressure, potentially pushing the pair towards the 23.6% Fibonacci retracement level at 159.30. A break below this level could result in a further drop towards the 157.45-156.70 region.

Therefore, despite the pair returning to the bullish channel, there are still some downside risks in the short-term outlook. To alleviate these risks, the pair would need to make a sustained advance above the 163.70 level. Till we do not advise to sell GBP/JPY.

Support and Resistance Level: -