GBP/JPY flatlines in 163.20 area as fall in global yields post-US CPI offer yen some respite


  • GBP/JPY is currently trading flat in the 163.20 area, as a fall in global yields post-US CPI supports the yen.
  • The pair wasn’t reactive to mixed UK jobs data on Tuesday, and focus now shifts to Wednesday’s UK CPI release.

GBP/JPY has stabilised in the lower-163.00s on Tuesday, after mixed UK labour market data didn’t give pound sterling much impetus, and with a pullback in global yields from recent highs in the wake of not as hot as forecast US inflation easing pressure on the yen. The pair has swung between 162.80-163.60ish and is currently trading flat on the day in the 163.20 area as the FX market focus has been more on 1) outperformance in commodity-sensitive currencies like NOK, AUD and NZD and 2) underperformance in USD post the release of US inflation figures.

Speaking of which, even though the headline rate of Consumer Price Inflation hit a new four-decade high at 8.5%, core measures of price pressures weren’t as hot as feared, leading markets to wind in some recently built-up hawkish Fed bets. As a result, US bond yields are pulling back from multi-year highs hit earlier in the day and weighing on yields in the Eurozone, UK and other developed markets.

This is handing the yield-sensitive yen some respite, with the currency having been battered by widening rate differentials in recent weeks. Looking ahead to the rest of the week, traders will be keeping an eye on whether the pullback in yields has further legs. If so, a dip back towards 162.00 is likely for GBP/JPY.

But UK CPI data is out on Wednesday and if it surprises to the upside, could be a bullish catalyst for sterling. Whether that would be enough to see the pair test March highs in the mid-164.00s is another question.

GBP/Jpy

Overview
Today last price 163.33
Today Daily Change -0.04
Today Daily Change % -0.02
Today daily open 163.37
 
Trends
Daily SMA20 159.93
Daily SMA50 156.91
Daily SMA100 155.2
Daily SMA200 153.92
 
Levels
Previous Daily High 163.85
Previous Daily Low 161.67
Previous Weekly High 162.37
Previous Weekly Low 160.28
Previous Monthly High 164.64
Previous Monthly Low 150.99
Daily Fibonacci 38.2% 163.02
Daily Fibonacci 61.8% 162.5
Daily Pivot Point S1 162.08
Daily Pivot Point S2 160.79
Daily Pivot Point S3 159.9
Daily Pivot Point R1 164.26
Daily Pivot Point R2 165.14
Daily Pivot Point R3 166.43

 

 

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