GBP/JPY: Eyes 191.71 below 193.30 (76.4% Fib of Jun 24 to July 8 plunge)
The GBP/JPY pair is trading with moderate losses on Thursday after having witnessed gains for five straight sessions. The cable has been sold today, tracking the losses in the common currency on the back of Yellen’s hawkish comments on Wednesday. Meanwhile, the Japanese Yen has stayed relatively resilient.
The British Pound, along with the common currency remains vulnerable to Greek saga. Though Greek parliament approved the reforms on Wednesday, the Grexit is still not off the table. Furthermore, the Draghi’s comments today could also influence the British Pound. In case Draghi hints readiness to front load QE or willingness to increase QE in case of messy Grexit, we could see a sell-off in the EUR drag the GBP lower as well. In this case, the cable may remain relatively resilient compared to the EUR/USD on the sell-off in the EUR/GBP cross. Still, the GBP/JPY may extend weakness as the JPY could strengthen in line with the decline in the EUR/JPY cross.
Another major trigger comes on Friday in the form of US CPI data for June. The bearish view on the GBP/JPY is at the risk of a better-than-expected core inflation figure. In this case, the US treasury yields could spike on the increased possibility of a rate hike in the US and thereby lead to sharp fall in the Japanese Yen. On the other hand, the GBP is likely to remain relatively resilient as the BOE is widely expected to hike rates after the Fed does. Meanwhile, a weaker core inflation figure could act in a opposite manner and lead to a sharp fall in the GBP/JPY pair.
Technicals – daily close below 193.30 could be bearish
The cross currently trades around 193.20; below 193.30 (76.4% Fib of Jun 24 to July 8 plunge).
ON the hourly chart, the pair has already confirmed an hourly close below 193.30, followed by a re-test of the same and decline to the hourly 50-MA at 193.15.
Moreover, the hourly 50-MA acted as strong support on July 14, when the cross bounced back from the same. Consequently, a break below the hourly 50-MA at 193.15 could accelerate losses 192.58-192.32.
The bearish hourly RSI also increases the possibility of a break below 192.58-192.32 and dip to 191.76 (61.8% Fib of Jun 24 to July 8 plunge).
The bearish view is at risk in case of an hourly close above 193.85. In this case, the pair may re-test 195.00 levels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD hovers near 1.0700 ahead of US data
EUR/USD struggles to build on Wednesday's gains and fluctuates in a tight channel near 1.0700 on Thursday. The US Dollar holds its ground following the Fed-inspired decline as market focus shifts to mid-tier US data releases.
GBP/USD holds steady above 1.2500 following Wednesday's rebound
GBP/USD stays in a consolidation phase slightly above 1.2500 on Thursday after closing in the green on Wednesday. A mixed market mood caps the GBP/USD upside ahead of Unit Labor Costs and Jobless Claims data from the US.
Gold retreats to $2,300 despite falling US yields
Gold stays under bearish pressure and trades deep in negative territory at around $2,300 on Thursday. The benchmark 10-year US Treasury bond edges lower following the Fed's policy decisions but XAU/USD struggles to find a foothold.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.