|

GBP/JPY continues to gain ground despite weak UK PMIs

  • The GBP/JPY traded in the 181.26 - 182.81 range, set to close its sixth weekly gain in a row.
  • The Sterling seemed to get traction thanks to the hawkish BoE’s decision on Thursday despite weak PMIs.
  • Soft Japanese inflation figures applied further pressure on the Yen.


On Friday, GBP/JPY continued to push the cross to fresh cycle highs at 182.80 after finding support at the 181.25 area. In that sense, the Sterling continued to gain ground on the back of Thursday’s Bank of England (BoE) hawkish surprise to raise rates by 50 basis points and held its ground despite weak British PMIs from June.

The Sterling maintains hawkish-BoE-momentum

British PMIs came in weak, the S&P Global showed that the Manufacturing PMI from the UK from May, dropped to 46.2 vs the 46.8 expected, while the Services PMI held in expansion territory, coming in at 53.7 but below the 54.8 expected. 

Despite the weak economic data, the Sterling maintained the momentum gained on Thursday after the surprising 50 bps hike by the BoE. In that sense, the statement hinted at more rate hikes confirming that the bank will do “what’s necessary” in order to curve down inflation to 2%. Relating to PMIs, the Bank confirmed that it expects the British Gross Domestic (GDP) to flatten in Q2. However, Governor Andrew Bailey, in the presser, gave more emphasis to inflationary pressures as he stated that “they are still too high, and we have got to deal with it”.

On the other hand, soft inflation figures in Japan are adding pressure on the Yen. The National Consumer Price Index and Core Inflation for May were lower than expected suggesting that the BoJ will maintain its dovish stance. Looking forward, investors will pay close attention to Governors’ Ueda from the BoJ and Christine Lagarde from the ECBs’ speeches next Wednesday at the ECB Sintra Forum.

GBP/JPY Levels to watch

According to both the weekly and daily charts, the GBP/JPY holds a bullish outlook for the short term. In the latter, the positive outlook is more clear as investors tallied a sixth weekly gain, while on the daily chart, indicators are losing some steam.

Upcoming resistance for GBP/JPY is seen at the zone at the 183.00 level, followed by the 183.50 zone and the 184.00 area. On the other hand,the daily low at 181.20 level remains the nearest support for the cross, which if broken, will bring into play the 180.00 zone and 179.00 level.

GBP/JPY Daily chart

GBP/JPY

Overview
Today last price182.77
Today Daily Change0.33
Today Daily Change %0.18
Today daily open182.44
 
Trends
Daily SMA20176.46
Daily SMA50172.26
Daily SMA100167.28
Daily SMA200165.44
 
Levels
Previous Daily High182.56
Previous Daily Low180.72
Previous Weekly High182.04
Previous Weekly Low174.36
Previous Monthly High174.28
Previous Monthly Low167.84
Daily Fibonacci 38.2%181.86
Daily Fibonacci 61.8%181.42
Daily Pivot Point S1181.25
Daily Pivot Point S2180.06
Daily Pivot Point S3179.4
Daily Pivot Point R1183.09
Daily Pivot Point R2183.75
Daily Pivot Point R3184.94

Author

Patricio Martín

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

More from Patricio Martín
Share:

Editor's Picks

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold loses the grip, recedes toward $4,350

Gold extends its intraday pullback on Thursday, retesting the $4,350 zone per troy ounce, or three-day troughs. Meanwhile, the yellow metal continues to monitor developments from the Middle East as well as bets surrounding the potential Fed’s rate path.

Ethereum Price Forecast: Fidelity plans to add staking to ETH ETF amid yield debate
Asset manager Fidelity has filed with the US Securities and Exchange Commission (SEC) to permit staking in its Ethereum (ETH) exchange-traded fund (ETF), the Fidelity Ethereum Fund (FETH), which holds over $898 million in net assets.
Week ahead – Summer lull could be tested by geopolitics and central bank expectations

US dollar stabilizes as September Fed hike bets remain subdued. Market volatility stays low, but thin liquidity could amplify movements. Key UK data could challenge pound strength; euro craves bullish catalysts.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.