- GBP/JPY trapped near 189.00 after a failed bid for 189.50.
- BoJ continues to flirt with hints about the end of negative rates.
- UK data provides little spark for chart moves this week.
GBP/JPY saw a thin rally on Wednesday, testing into 189.50 before wrapping up the midweek trading session near the 189.00 handle. The pair is cautiously recovering after an early-week dip into the 188.00 handle.
The Bank of Japan (BoJ) continues to wink at the possibility of ending the negative rate regime. BoJ Governor Kazuo Ueda nodded at “tweaking negative rates” early Wednesday, as the BoJ prepares to place the burden of the final decision on the shoulders of spring negotiations on wages between unions and management at large business organizations. The BoJ has been openly transparent that how hawkish or dovish the Japanese central bank will be in the near-term will hinge entirely on wage growth following the end and data collection of Japan’s spring negotiations.
UK data came in mixed early on Wednesday, but did little to move the needle. UK Industrial Production fell to -0.2% in January after December’s 0.6% print, missing the forecast flat print of 0.0%. UK MoM Manufacturing Production also declined, coming in at the expected 0.0% compared to the previous 0.8%. UK Gross Domestic Product (GDP) in January also met expectations, printing at 0.2% versus the previous -0.1%.
The rest of the trading week sees only thin data for both the Pound Sterling (GBP) and the Japanese Yen (JPY). Friday will round out the Guppy’s hits on the economic calendar with mid-tier UK Consumer Inflation Expectations for the next 12 months. UK consumer inflation forecasts last printed at 3.3%.
GBP/JPY technical outlook
GBP/JPY is on a slow grind higher after Monday’s bounce from the 188.00 handle, facing intraday technical resistance from 189.50 as the pair drifts around 189.00. A stiff supply zone is built into the 191.00 region to capture any bullish pushes into the high end.
Despite the recent end of a five-day bear run in the GBP/JPY chart after the pair backslid from 191.00, the Guppy is barely down from its highest bids since 2015, and the pair remains well-bid above the 200-day Simple Moving Average (SMA) at 184.14.
GBP/JPY hourly chart
GBP/JPY daily chart
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.