GBP/JPY rises above 184.00 ahead of Ueda’s speech

GBP/JPY rose near 184.15, but further downside may be on the horizon as bullish momentum wanes.
Japan reported soft inflation figures from July.
Eyes on Ueda’s and BoE’s official speeches on Saturday.

Patricio Martín FXStreet

At the end of the week, the GBP/JPY slightly advanced, tallying a 0.50% weekly loss. Inflation figures from July from Japan weakened the Yen while the GBP trades relatively soft against its rivals. There won’t be any highlights for the rest of the session, and the focus is on Ueda’s and BoE’s official speeches on Saturday.

On the Japanese front, August's Tokyo Consumer Price Index (CPI) came in soft and decelerated to 2.9% YoY vs. the 3% expected and the previous 3.2%. The Core CPI remained steady at 4%, while the measure excluding Fresh Foods failed to meet expectations and fell to 2.8% YoY, lower than the 2.9% expected. The low inflation readings exacerbated the dovish bets on the Bank of Japan (CPI), contributing to the JPY being one of the worst performers during the session amongst the major currencies. Focus now shifts to Governor Ueda’s speech on Saturday.

On the other hand, the Pound continues to trade weak against its rivals following the poor results of the S&P Global PMIs from August. The economy showed signs of weakness and flashed alarms amongst the investors concerning the British economy’s health. Last week, the UK reported strong wages and inflation data, which doesn’t align with an economy sliding into a recession, just as the Bank of England (BoE) stated in its last statement.

Looking forward, markets continue to bet on the BoE lifting rates between 5.75%-6% in this cycle, including 25 basis points hikes in September, November and February 2024.

GBP/JPY Levels to watch

The technical analysis of the daily chart points to a neutral to a bearish outlook for GBP/JPY, indicating a decline in bullish strength. The Relative Strength Index (RSI) points north above its middle point, while the Moving Average Convergence (MACD) displays stagnant red bars. On the other hand, the pair is above the 20,100,200-day SMAs, indicating that the bulls are in command of the broader picture.

Support levels: 183.20 (20-day SMA), 182.00, 181.00

Resistance levels: 184.00, 185.00, 186.00.

GBP/JPY Daily chart

GBP/JPY

Overview
Today last price	184.23
Today Daily Change	0.49
Today Daily Change %	0.27
Today daily open	183.74

Trends
Daily SMA20	183.69
Daily SMA50	182.62
Daily SMA100	176.64
Daily SMA200	169.47

Levels
Previous Daily High	184.78
Previous Daily Low	183.6
Previous Weekly High	186.47
Previous Weekly Low	183.46
Previous Monthly High	184.02
Previous Monthly Low	176.32
Daily Fibonacci 38.2%	184.05
Daily Fibonacci 61.8%	184.33
Daily Pivot Point S1	183.3
Daily Pivot Point S2	182.87
Daily Pivot Point S3	182.13
Daily Pivot Point R1	184.47
Daily Pivot Point R2	185.21
Daily Pivot Point R3	185.64

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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