GBP/JPY Price Analysis: Soars towards 166.00 after Fed’s dovish statement

GBP/JPY advanced sharply as the US Fed tilted dovish on its monetary policy statement.
Sentiment is positive once the US central bank conceded that the US economy is softening.
GBP/JPY Price Analysis: Upward biased and might test 167.00 soon.

Christian Borjon Valencia FXStreet

The GBP/JPY rallies towards the 166.00 figure amidst a risk-on impulse due to the US Federal Reserve hiking 75 bps the Federal funds rate (FFR) while also acknowledging that the US economy is slowing and conceding that they are in neutral territory. At the time of writing, the GBP/JPY is trading at 165.96.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY daily chart is upward biased. On Wednesday, unexpectedly, the pair jumped 133 pips and reclaimed the 166.00 mark, courtesy of the GBP/USD bounce after the Fed decision. That said, the GBP/JPY broke a two-month-old downslope trendline, which helped sellers to spot fresh entries in the pair, but once cleared, that would pave the way for further gains.

Therefore, the GBP/JPY's first resistance would be the June 28 daily high at 166.94, followed by the June 22 swing high at 167.85.

GBP/JPY 1-hour chart

The GBP/JPY hourly chart also depicts the pair as upward biased. Nevertheless, GBP/JPY buyers should know that the exchange rate is facing a solid resistance of around 166.00. If the GBP/JPY breaks decisively above the previously mentioned, the next resistance would be the R1 daily pivot at 166.65. Once cleared, the next ceiling will be the R2 pivot at 167.37, followed by the June 22 high at 167.85.

GBP/JPY Key Technical Levels

GBP/JPY

Overview
Today last price	165.96
Today Daily Change	1.33
Today Daily Change %	0.81
Today daily open	164.63

Trends
Daily SMA20	164.09
Daily SMA50	163.74
Daily SMA100	162.24
Daily SMA200	158.24

Levels
Previous Daily High	164.97
Previous Daily Low	163.48
Previous Weekly High	166.25
Previous Weekly Low	163.01
Previous Monthly High	168.74
Previous Monthly Low	160
Daily Fibonacci 38.2%	164.4
Daily Fibonacci 61.8%	164.05
Daily Pivot Point S1	163.75
Daily Pivot Point S2	162.86
Daily Pivot Point S3	162.25
Daily Pivot Point R1	165.24
Daily Pivot Point R2	165.86
Daily Pivot Point R3	166.74

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold sticks to modest losses amid Fed hike bets; holds above $4,100 ahead of US CPI

Gold meets fresh supply, eroding a part of the previous day's strong gains to the $4,150 resistance zone, albeit it holds above the $4,100 mark heading into the European session. Firming US Federal Reserve rate-hike expectations turn out to be a key factor driving flows away from the non-yielding bullion. Meanwhile, the US Dollar struggles to lure buyers amid mixed signals regarding the state of diplomatic talks between the US and Iran, offering some support to the commodity as traders seem hesitant ahead of US consumer inflation figures.

Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

This weeks’ two big inflation reports will offer perspective

Payrolls on Friday surprised with a big gain, 165,000 new jobs rather than the 65,000 forecast. Also the unemployment rate fell from 4.2% to 4.1% although average hourly earnings are up only 0.4% ($32.75). This weeks’ two big inflation reports will offer perspective. Tomorrow it’s CPI and on Friday, which is a Friday the 13th, it’s PPI.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.