Published on Mar 29, 2023

Daily Analysis For GBP/JPY 29-03-2023

GBP/JPY Analysis

Economic Events and Scenario for GBP/JPY

Economic Events : -

GMT	Event	Impact	Currency
01:30	(Australia) Monthly CPI Indicator	High	AUD
07:00	(Germany) GfK Consumer Confidence	High	EUR
07:45	(France) Consumer Confidence	Medium	EUR
08:00	(Euro Area) ECB Non-Monetary Policy Meeting	Medium	EUR
09:00	(Austria) Bank Austria Manufacturing PMI	High	EUR
09:00	(Switzerland) Economic Sentiment Index	Low	CHF
09:00	(Germany) Bundesbank Balz Speech	Low	EUR
09:30	(Slovenia) Retail Sales MoM	Low	EUR
09:30	(Slovenia) Retail Sales YoY	Low	EUR
09:30	(United Kingdom) Net Lending to Individuals MoM	Low	GBP
09:30	(United Kingdom) BoE Consumer Credit	Medium	GBP
09:30	(United Kingdom) Mortgage Approvals	Medium	GBP
09:30	(United Kingdom) Mortgage Lending	Medium	GBP
10:00	(Malta) PPI YoY	Low	EUR
10:10	(Italy) 6-Month BOT Auction	Low	EUR
10:10	(Italy) 12-Month BOT Auction	Low	EUR
10:30	(United Kingdom) BoE Financial Policy Summary and Record	Medium	GBP
11:00	(Latvia) Retail Sales YoY	Low	EUR
11:00	(Latvia) Retail Sales MoM	Low	EUR
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 Market Index	Low	USD
12:00	(United States) MBA Mortgage Refinance Index	Low	USD
12:00	(United States) MBA Purchase Index	Low	USD
14:00	(Switzerland) SNB Quarterly Bulletin	Low	CHF
15:00	(United States) Pending Home Sales MoM	Medium	USD
15:00	(United States) Pending Home Sales YoY	Medium	USD
15:00	(United States) Fed Barr Testimony	Medium	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 Heating Oil Stocks Change	Low	USD
15:30	(United States) EIA Gasoline Production Change	Low	USD

Today's Scenario: - The GBP/JPY pair rallied to a weekly high of 161.80 on Monday, buoyed by a positive risk sentiment and rising global bond yields.

In a recent speech, Bank of England Governor Bailey emphasized the need for vigilance in monitoring signs of persistent inflationary pressures. He suggested that further monetary tightening may be required if such pressures materialize. While there are indications of economic resilience, Bailey warned that the inflation path may not be entirely smooth. A critical monetary policy priority is preventing externally-driven inflation from becoming permanent. Bailey also noted significant strains in certain parts of the global banking system, which could have implications for the broader global economy.

Bailey acknowledged that the full impact of recent bank rate increases has yet to be felt, and early retirement-driven inactivity may have contributed to a rise in cyclical rates. The Bank of England has raised bank rates significantly in response to these factors. However, Bailey cautioned that inflation could be more persistent than anticipated, and staying vigilant for signs of inflationary pressure is crucial. If such pressures emerge, further monetary tightening may be necessary to keep inflation under control.

Buy Scenario: - Given the current uncertainty surrounding the world's economic health, it's important to remain cautious. It's also worth noting that the 165 level appears to be a significant level of resistance that traders should keep an eye on. Till we do not advise to buy GBP/JPY.

Sell Scenario: - The British government has emphasized their focus on combating inflation rather than addressing the banking crisis. This indicates that they will continue with a tight monetary policy, which could keep the British pound relatively strong. Although the 200-day exponential moving average is a key level of resistance, the market seems to be trading within a range with flat moving averages, indicating no strong directional bias at the moment.

However, as long as the trendline support at the 157.50 level remains intact, the market is more likely to go up than down. Nonetheless, there could be a lot of market noise above, so the market may trade within a range, we do not advise to sell GBP/JPY.

Support and Resistance Level: -