Published on Mar 27, 2023

Daily Analysis For GBP/JPY 27-03-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
2:30	(China) Industrial Profits (YTD) YoY	Low	CNY
6:00	(Finland) Consumer Confidence	Low	EUR
6:00	(Finland) Business Confidence	Low	EUR
6:00	(Japan) Leading Economic Index	Low	JPY
6:00	(Japan) Coincident Index	Low	JPY
9:00	(Germany) Ifo Current Conditions	Low	EUR
9:00	(Germany) Ifo Business Climate	High	EUR
9:00	(Germany) Ifo Expectations	Low	EUR
9:00	(Euro Area) Loans to Companies YoY	Low	EUR
9:00	(Euro Area) M3 Money Supply YoY	Low	EUR
9:00	(Euro Area) Loans to Households YoY	Low	EUR
9:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
9:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
9:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
9:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
9:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
9:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
9:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
11:00	(United Kingdom) CBI Distributive Trades	Medium	GBP
11:00	(France) Jobseekers Total	Low	EUR
11:00	(France) Unemployment Benefit Claims	Medium	EUR
11:00	(Greece) Total Credit YoY	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
15:30	(United States) Dallas Fed Manufacturing Index	Medium	USD
15:40	(Euro Area) ECB Elderson Speech	Medium	EUR
16:00	(Euro Area) ECB Schnabel Speech	Medium	EUR
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
18:00	(United States) 2-Year Note Auction	Low	USD
18:00	(United Kingdom) BoE Gov Bailey Speech	Medium	GBP
22:00	(United States) Fed Jefferson Speech	Medium	USD

Today's Scenario: - The GBP/JPY pair has continued to climb above 160.00 during the Asian session, boosted by the release of better-than-expected UK Retail Sales data. In February, monthly Retail Sales increased by 1.2%, surpassing the consensus estimate of 0.2% and the previous figure of 0.9%. Although annual Retail Sales data in the UK contracted by 3.5%, this was better than the expected contraction of 4.7%.

Strong retail demand from UK households may increase concerns about persistent inflation, as companies may be motivated to raise their Producer Price Index (PPI), which could increase the burden on households. However, Bank of England (BoE) Governor Andrew Bailey believes that "There is evidence of encouraging progress on inflation, we have to be vigilant," as stated in a recent interview with the BBC.

Buy Scenario: - GBP/JPY has risen to a new intraday high near 160.35 as buyers return to the market on Monday in London. The pair has broken above the 50-hour moving average, which is a positive sign for buyers. The recent rebound can be attributed to the successful break of a downward-sloping resistance line from last Wednesday, with the bullish MACD signals and ascending RSI line adding to the bullish sentiment.

Despite the upside bias, the 200-hour moving average resistance around 161.10 is likely to be a key level for further gains. If the buyers manage to break through this resistance, the previous weekly top around 163.35 and the monthly high around 164.25 may attract further buying interest. Till we do not advise to buy GBP/JPY.

Sell Scenario: - The GBP/JPY pair is currently trading at an intraday high of around 160.35, as bullish sentiment returns after a three-day absence. The pair has broken above the 50-hour moving average, which is a positive sign for buyers.

The recent rebound in GBP/JPY could be attributed to the successful break of a downward-sloping resistance line from last Wednesday. Additionally, the bullish signals from the MACD and the ascending RSI (14) line also support the upside bias.

However, the 200-hour moving average, which is currently at 161.10, could be a significant hurdle for the GBP/JPY bulls to overcome. If they manage to surpass this level, the previous weekly top and the monthly high, at around 163.35 and 164.25 respectively, could be potential targets for further upside, we do not advise to sell GBP/JPY.

Support and Resistance Level: -