- GBP/JPY drops after being unable to hold on top of 155.00.
- Key data ahead: Japanese PMIs and UK jobs report.
The GBP/JPY pair peaked during the European session at 155.37, the highest level since the Brexit referendum. Then it pulled back and erased gains. It bottomed at 153.70 and near the end of the day, it was hovering around 154.35, down 60 pips from yesterday’s close.
The yen was among the top performer on Tuesday. It gained momentum hours after the decision of the Bank of Japan to keep monetary policy unchanged. The outlook for economic activity was little change. During Kuroda’s press conference the yen bottomed but then bounced to the upside.
The pound today corrected after rising sharply on Monday. Yesterday’s rally was driven mainly by GBP/USD that rose to 1.4000 for the first time since the Brexit referendum. The rally pushed EUR/GBP to 1-month lows under 0.8800 and sent GBP/JPY to post the highest daily close since June 23, 2016.
On Wednesday the key economic event will the UK jobs reports. Earlier in Asian hours, the Japanese PMI will be released.
Technical outlook
GBP/JPY continues to move with a bullish bias. Today’s slide appears to be a normal correction. The pound needs to post a daily close significantly above 155.00 to clear the way to more gains. The next strong barrier is seen at 155.85.
On the flip side, support is seen at 153.60/70, below that level the pound would momentum. A key level to watch might be the 152.40/50 area (20-day moving average). A consolidation significantly below could point toward a stronger yen.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.