- Sterling dropping against the Yen as risk aversion comes back.
- UK CPI data promises some healthy volatility at 09:30 today.
GBP/JPY is stooping lower in Tokyo markets, trading to the downside of the 150.00 handle ahead of the London session.
The pair is facing downside pressure in Asian markets as risk aversion comes back into play, with equities taking a haircut, the Nikkei Index back in the red for the day, and commodities struggling to maintain their positions. Safe havens are on the bids today, with the Yen being the reigning haven champion, pushing up against all other major currencies as traders struggle to find their risk appetite this week.
A swing in sentiment might come at 09:30 GMT today, when the UK drops their CPI data for January. CPI is lashed together with output and purchasing indexes, but Consumer Price Index numbers will be the main driver today on the GBP side; market analysts are anticipating a slight contraction in price inflation, calling for a reading of 2.9% versus the previous of 3.0%. An upside beat could give the Sterling some room to move today, and bulls would be happy to take it, as the pair has slid recently on rough volatility, down from an 18-month high reached just two weks ago.
Intraday trading promises to be whipsaw-heavy, with support/resistance at 149.44 and 150.75 respectively; Daily candles show a currency pair in a strong corrective pullback, with price currently trading beneath the 34 EMA at 152.34, but still above the 200-day SMA at 147.52. A continued drop from here will see price running into a support level that also coincides with the 200-day SMA.
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