#GBPJPY @ 168.836 touches a five-month high on Tuesday, albeit lacks follow-through buying. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• GBP/JPY touches a five-month high on Tuesday, albeit lacks follow-through buying.
• A generally positive risk tone undermines the safe-haven JPY and remains supportive.
• The mixed UK jobs data fails to impress bulls or provide a fresh impetus to the cross.
• Traders also seem reluctant ahead of the UK CPI report and the BoE meeting this week.

The pair currently trades last at 168.836.

The previous day high was 169.02 while the previous day low was 167.1. The daily 38.2% Fib levels comes at 168.29, expected to provide support. Similarly, the daily 61.8% fib level is at 167.83, expected to provide support.

The GBP/JPY cross edges higher for the fifth successive day and climbs to a five-week high, around the 169.25 region during the early European session.

A generally positive risk tone, bolstered by the easing of COVID-19 curbs in China, continues to weigh on the safe-haven Japanese Yen and acts as a tailwind for the GBP/JPY cross. The British Pound, on the other hand, draws support from stronger UK wage growth figures, which suggests that the Bank of England will continue to raise borrowing costs to combat stubbornly high inflation.

The UK Office for National Statistics (ONS) reported that Average Weekly Earnings, excluding bonuses, rose by +6.1% during the three months to October as compared to +5.8% in the previous month. The gauge including bonuses edged higher to 6.1% in October from 6.0% in September. This helps offset an uptick in the unemployment rate and an unexpected rise in the claimant count change.

That said, a bleak outlook for the UK economy acts as a headwind for the Sterling Pound and keeps a lid on any further gains for the GBP/JPY cross. In fact, British Finance Minster Jeremy Hunt told BBC News on Monday that the UK economy is likely to get worse before it gets better. Traders also seem reluctant to place aggressive bets ahead of this week’s key data/central bank event risk.

The latest UK consumer inflation figures are due for release on Wednesday. This will be followed by the Bank of England meeting on Thursday. This, in turn, warrants some caution for bullish traders and positioning for any further appreciating move for the GBP/JPY cross. The fundamental backdrop, however, suggests that any meaningful dip might be seen as a buying opportunity and remain limited.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 168.94 at the time of writing. Pair opened at 169.0 and is trading with a change of -0.04 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 166.85, 50 SMA 166.7, 100 SMA @ 164.5 and 200 SMA @ 163.3.

The previous day high was 169.02 while the previous day low was 167.1. The daily 38.2% Fib levels comes at 168.29, expected to provide support. Similarly, the daily 61.8% fib level is at 167.83, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 167.72, 166.44, 165.79
• Pivot resistance is noted at 169.65, 170.3, 171.57

[/s2If]
Join Our Telegram Group