#GBPJPY @ 166.666 takes the bids to refresh multi-day high despite mixed UK statistics. (Pivot Orderbook analysis)

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• GBP/JPY takes the bids to refresh multi-day high despite mixed UK statistics.
• UK GDP, Manufacturing/Industrial Production numbers disappoint but trade balance improved in July.
• Treasury yields regain upside momentum as central bankers keep hawkish bias intact.
• Chatters over BOJ, covid relief package challenge upside momentum.

The pair currently trades last at 166.666.

The previous day high was 166.24 while the previous day low was 164.31. The daily 38.2% Fib levels comes at 165.05, expected to provide support. Similarly, the daily 61.8% fib level is at 165.51, expected to provide support.

GBP/JPY marches towards 167.00, up 0.90% around 166.70, as mixed UK economics join firmer Treasury yields to please bulls during the initial hours of London open on Monday. The upside momentum also takes clues from the technical signals as the quote breaks the short-term key hurdle for the bulls.

That said, the UK’s Gross Domestic Product (GDP) for July eased to 0.2% versus 0.5% market forecasts and -0.6% prior. Further, the figures for Industrial Production and Manufacturing Productions also marked a downbeat outcome on an MoM basis, despite improving from priors on YoY. It should be noted, however, that trade balance data have been firmer and seemed to have helped the GBP/JPY bulls of late.

Also read: UK Manufacturing Production rises 0.1% MoM in July vs. 0.6% expected

Elsewhere, US 10-year Treasury yields add two basis points (bps) to 1.34% while reversing the previous day’s downbeat performance amid Monday’s sluggish session, due to China’s holiday and a light calendar. Even so, recently hawkish comments from the policymakers of the European Central Bank (ECB) and the US Federal Reserve (Fed) seem to keep the fears of the recession on the table. On the same line could be the hawkish hopes from the Bank of England (BOE), especially after Liz Truss won the UK PM candidacy.

On the contrary, economic fears surrounding Britain, mainly due to the expectations of further activity halt on Queen’s death, join the chatters over the Bank of Japan’s (BOJ) market intervention to defend the yen and likely rolling back of the covid stimulus also probe the bulls.

It’s worth mentioning that the absence of China and a light calendar elsewhere might restrict the GBP/JPY moves looking forward.

A sustained upside break of a 2.5-month-long horizontal resistance area, now support around 166.30, directs the GBP/JPY towards the yearly peak surrounding 168.50. During the anticipated run-up, the tops marked in late June and April, respectively around 167.85 and 168.40, could act as buffers.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 166.65 at the time of writing. Pair opened at 165.17 and is trading with a change of 0.90% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 162.53, 50 SMA 163.07, 100 SMA @ 162.91 and 200 SMA @ 159.68.

The previous day high was 166.24 while the previous day low was 164.31. The daily 38.2% Fib levels comes at 165.05, expected to provide support. Similarly, the daily 61.8% fib level is at 165.51, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 164.24, 163.31, 162.31
• Pivot resistance is noted at 166.17, 167.18, 168.11

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