|

GBP/JPY drifts lower past 181.50 at two-week trough on downbeat yields, UK employment eyed

  • GBP/JPY prints four-day losing streak, fades bounce off multi-day low of late.
  • Yields edge lower as inflation fears recede, recession woes escalate.
  • BoE Governor Bailey, UK Treasurer Hunt show readiness to tame inflation with “whatever necessary”.
  • BoJ officials keep defending easy monetary policy but fears of Japan meddling propel Yen.

GBP/JPY holds lower ground near 181.20, the lowest levels in 12 days, as downbeat US Treasury bond yields join fears of Japan intervention to weigh on the cross-currency pair ahead of the UK’s employment figures, scheduled for publishing on early Tuesday.

That said, the US Treasury bond yields remain pressured after reversing from the highest level since March on Monday. It should be noted that the benchmark US 10-year Treasury bond yields printed the first daily loss in July the previous day whereas the two-year counterpart declined for the second consecutive day, to respectively near 4.00% and 4.86%.

Elsewhere, UK finance minister Jeremy Hunt spoke alongside Bank of England (BoE) Governor Andrew Bailey on Monday while showing readiness to take measures to return inflation to its 2% target.  It’s worth noting that the BoE Governor Bailey tried defending the restrictive monetary policy while pushing back concerns about the UK’s economic slowdown.

It should be noted that the Bank of Japan (BoJ) officials remain dovish and hence flag fears of the GBP/JPY pair’s recovery, should the UK’s employment data manage to back the recently hawkish BoE talks.

Above all, the latest easing inflation data from the UK, US and China tame hawkish central bank concerns but the broad fears of witnessing an economic slowdown keep pushing traders toward the traditional havens, likely the Japanese Yen (JPY), Gold and the Treasury bond yields.

Moving on, the UK’s Claimant Count Change for June will join the Unemployment Rate for three months to May to direct intraday moves.

Technical analysis

A clear downside break of the 21-DMA support, around 180.00 by the press time, favors the GBP/JPY bears.

Additional important levels

Overview
Today last price181.21
Today Daily Change-0.53
Today Daily Change %-0.29%
Today daily open181.74
 
Trends
Daily SMA20181.87
Daily SMA50175.96
Daily SMA100170.04
Daily SMA200166.81
 
Levels
Previous Daily High183.23
Previous Daily Low181.1
Previous Weekly High184.02
Previous Weekly Low182.02
Previous Monthly High183.88
Previous Monthly Low172.67
Daily Fibonacci 38.2%181.91
Daily Fibonacci 61.8%182.42
Daily Pivot Point S1180.82
Daily Pivot Point S2179.9
Daily Pivot Point S3178.7
Daily Pivot Point R1182.94
Daily Pivot Point R2184.15
Daily Pivot Point R3185.07

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital
If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.
BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.