GBP/JPY flirts with trendline hurdle ahead of UK CPI release

GBP/JPY is attempting a break above a two-month falling trendline.
An above-forecast UK CPI reading could put a strong bid under the British Pound.

Omkar Godbole FXStreet Contributor

The GBP/JPY pair has been solidly bid in the last 24 hours, but a convincing move above the falling trendline (from April 18 low and April 26 low) has remained elusive.

As of writing, the pair is trading just above the trendline hurdle of 147.65. The USD/JPY pair closed above the 200-day moving average yesterday, opening doors for further Yen weakness.

So, the stage is set for GBP/JPY to scale the falling trendline hurdle in a convincing manner.

Focus on UK CPI

The UK consumer price index (CPI), scheduled for release at 08:30 GMT, is expected to show the cost of living ticked up 2.5 perecent year-on-year in May vs 2.4 percent in April. An above-forecast reading will likely help GBP/JPY beat the trendline hurdle in a convincing manner.

On the other hand, a weaker-than-expected print risks derailing the rally in GBP/JPY.

GBP/JPY Technical Levels

Resistance: 148.11 (recent high), 148.38 (April 2 low), 148.97 (100-day moving average).

Support: 147.52 (session low), 147.05 (May 8 low), 146.82 (10-day moving average).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD looks firm; focus is on 0.7000

AUD/USD starts the week on a positive footing, approaching the 0.7000 hurdle helped by renewed sentiment following firmer-than-expected GDP data from China. Meanwhile, the continuation of the pair’s recovery also comes in contrast with the decent advance in the Greenback, which regains some traction followong last weeks pullback.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold drops to daily lows below $4,150

Gold builds on Friday’s retracement and slips back below the $4,150 mark per troy ounce on Monday. The better tone in the US Dollar and a decent bounce in US Treasury yields across the curve keep the yellow metal under pressure for now.

XRP struggles at support as ETF outflows and bearish momentum cloud recovery outlook

Ripple (XRP) holds slightly above $1.30 on Monday, with short-term recovery prospects fading. Strong structural resistance toward $1.40 continues to cap upside, raising the risk of further downside below $1.30.

Higher than expected inflation shakes markets: What to prepare for?

US CPI report came in stronger than expected, lifting the probability of a December rate hike higher once again. Even though Fed Chair Warsh reinforced expectations of a hold for the October’s meeting, markets now face a two-step event: a likely pause on October 28, followed by an interest rate hike on December 9.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.