- GBP/JPY prints seven-day downtrend, stays pressured near multi-day low.
- UK PM Johnson visits White House, US President Biden rejects challenges for NI borders.
- British-American deal, Brexit and China headlines eyed for intermediate moves but Fed, BOJ are crucial events.
GBP/JPY remains on the back foot around 149.10, down 0.12% intraday during the seven-day fall amid Wednesday’s Asian session.
The cross-currency pair justifies the market’s cautious mood ahead of the key weekly events, like the monetary policy decision from the Bank of Japan and the US Federal Open Market Committee (FOMC). While the Bank of Japan (BOJ) is less likely to offer any surprises, recently mixed data contrasts the Fed policymakers’ hawkish bias to confuse traders. Goldman Sachs recently backed the Fed tapering announcement and challenged the gold buyers. On the same line could be firmer US housing market data, namely Housing Starts and Building Permits for August, which backed hopes of hearing the word taper from the US Fed in Wednesday’s meeting.
Other than the pre-event caution, awaited return for China after a long weekend and amid chatters over Evergrande also weigh on the market sentiment. Evergrande Chairman and the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath recently tried to placate bears.
Additionally, the UK, Australia and US securities pact, followed by Bloomberg’s news stating that the European Union (EU) and the US aim to pledge more enforcement to curb China risk, add to the market’s fears. It’s worth noting that US President Joe Biden recently backed the Northern Ireland (NI) protocol during the UK PM Boris Johnson’s US visit.
On the positive side were, the hopes of stimulus, as hinted by House Speaker Nancy Pelosi, as well as the US Democratic Party’s push to suspend the debt ceiling. Recently, the US House votes 217-207 to favor temporary government funding and debt limit increase debate.
Amid these plays, S&P 500 Futures drop 0.25% by the press time whereas US Dollar Index (DXY) portrays the sluggish mood after easing from the monthly top during the last two days.
Moving on, the BOJ policy decision and China’s return will be watched for immediate direction whereas the headlines from the White House, relating to the US-UK trade deal, Brexit and China, may offer additional catalysts to watch. Above all, the Fed tapering is the key for the markets.
Sustained break of a two-month-old support line, now resistance near 149.85, directs GBP/JPY towards the six-month-old horizontal area surrounding 148.50.
Additional important levels
|Today last price||149.08|
|Today Daily Change||-0.15|
|Today Daily Change %||-0.10%|
|Today daily open||149.23|
|Previous Daily High||150.14|
|Previous Daily Low||148.96|
|Previous Weekly High||152.85|
|Previous Weekly Low||150.84|
|Previous Monthly High||153.32|
|Previous Monthly Low||149.19|
|Daily Fibonacci 38.2%||149.41|
|Daily Fibonacci 61.8%||149.69|
|Daily Pivot Point S1||148.74|
|Daily Pivot Point S2||148.26|
|Daily Pivot Point S3||147.56|
|Daily Pivot Point R1||149.93|
|Daily Pivot Point R2||150.62|
|Daily Pivot Point R3||151.11|
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