- GBP/JPY struggles for clear directions after the first weekly loss in five.
- Japan’s economic assessment, Kuroda’s comments fail to impress sellers amid inaction in the bond markets.
- UK fundamentals keep bears hopeful amid fears of economic slowdown.
- BOE’s Haskel, Mann could be eyed for intraday directions, UK PMIs are the key.
GBP/JPY remains directionless after a three-day uptrend, not to forget snapping the four-week uptrend, as traders await commentary from Bank of England (BOE) policymakers heading into Monday’s London open.
The pair’s latest moves portray trader indecision as the Japanese government maintains its economic assessment for June but a lack of action from US bond traders is failing to please yen buyers. Also, the Bank of Japan (BOJ) Governor Haruhiko Kuroda’s comments, suggesting FX rates should reflect fundamentals, also failed to gain major attention.
The UK’s downbeat fundamentals and the BOE’s failure to impress bulls underpins the British Pound’s (GBP) weakness. While the British government braces for inflated pay, UK Junior Treasury Minister Simon Clarke warned that if the government gives above-inflation pay awards, they will be in a difficult place, in terms of bringing down inflation.
Earlier in the day, the Financial Times (FT) mentioned that London City's bosses are warning the UK will fall into a recession this year.
Amid these plays, stock futures print mild gains in the UK and Europe after a downbeat close for US Treasury yields, mainly due to Friday’s softer US data and inaction afterward.
Moving on, BOE Monetary Policy Committee member Jonathan Haskel and Dr. Catherine L Mann will entertain GBP/JPY traders. Though, major attention will be given to the preliminary readings of UK PMIs for June amid impending recession fears.
Technical analysis
A clear rebound from the 50 DMA around 162.65 at the time of publication, GBP/JPY is moving towards the 165.65-70 hurdle before highlighting the “double top” highs near 168.50, potentially with bearish implications if they hold.
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