The GBPJPY declined for the third consecutive day and dropped to a low below 180.50.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER 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_level1)]

• The GBP/JPY tallied its third daily loss in a row and slid to a daily low below 180.50.

The pair currently trades last at 180.711.

The previous day high was 181.85 while the previous day low was 180.37. The daily 38.2% Fib levels comes at 180.93, expected to provide resistance. Similarly, the daily 61.8% fib level is at 181.28, expected to provide resistance.

The GBP/JPY retreated to the 180.30 area and then settled around 181.60 on Wednesday as the GBP weakened agains most of its rivals following soft inflation figures from June. As markets are betting on a less aggressive Bank of England (BoE) the GBP lost interest.

The Office for National Statistics from the UK reported that the Consumer Price Index (CPI) declined to 7.9% YoY in June, lower than the 8.2% estimated and the previous 8.7%. The Core CPI dropped to 6.9%, failing to live up to the expectations of 7.1%. The Producer Price Index (PPI) also dropped but was above the market consensus at -2.7% vs the -1.6% expected.

As a reaction, UK bond yields plunged as the BoE’s tightening expectations decreased. According to the World Interest Rates Probabilities (WIRP), the odds of 50 basis points (bps) hike in the next BoE meeting in August fell near 45%. For the next meeting, hikes are priced in September, November, and in February 2024. Markets are betting on 55% odds of a final 25 bps, which would see the terminal rate peaking at 5.75% vs. 6.25% at the start of this week and 6.5% at the start of last week.

That being said, the 2-year British yield dropped to its lowest level since mid-June, around 4.85%, while the 5 and 10-year rates to 4.30% and 4.19%, respectively, with all three seeing more than 3.50% declines.

Governor Kazuo Ueda hinted there wouldn’t be a policy tweak of the Yield Control Curve amid recent speculations. He stated that inflation is well below their forecast and noted that unless that premise is “shifted” the whole story would remain unchanged. Following the comments, Japanese bond yields decreased as markets bet on a dovish BoJ making the JPY struggle to find demand.

Moreover, Thursday’s highlight will be Japan’s Trade Balance data which would give markets a better understanding of the Japanese economic situation. Exports are expected to have increased by 2.2% YoY in June, and Imports to have decreased by 11.3% YoY, resulting in a Trade Balance deficit of nearly ¥-46.7B.

The daily chart suggests that the technical outlook for the GBP/JPY remains bearish for the short term. Soft inflation figures from the UK made bears regains momentum and indicators took a big hit as the Relative Strength Index (RSI) points south but still positive territory, while the Moving Average Convergence Divergence (MACD) printed a higher red bar.

Support Levels: 181.00, 180.50, 179.00.
Resistance Levels: 182.25 (20-day SMA), 182.50, 183.00.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 180.64 at the time of writing. Pair opened at 180.98 and is trading with a change of -0.19 % .

The pair is trading below its 20 Daily moving average @ 182.33, above its 50 Daily moving average @ 177.3 , above its 100 Daily moving average @ 171.13 and above its 200 Daily moving average @ 167.38

The previous day high was 181.85 while the previous day low was 180.37. The daily 38.2% Fib levels comes at 180.93, expected to provide resistance. Similarly, the daily 61.8% fib level is at 181.28, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 180.28, 179.58, 178.8
• Pivot resistance is noted at 181.77, 182.55, 183.25

[/s2If]
Download Nehcap EAWe have two EAs that are operational on our LIVE accounts.

1. EA-FIX: Check out the details here. Download EA-FIX . EA-FIX is a non-grid HFT scalper.
2. EA-GROWTH: High quality low dd EA using trend grids. Download EA_GROWTHJoin Our Telegram Group