GBP/JPY threatens 20-day SMA following Bailey’s speech

The GBP/JPY cross tallies a third-consecutive day of losses falling to a low of 181.10, below the 20-day SMA.
Andrew Bailey commented that he doesn’t know when rates will start to come down.
Eyes on British labour market data on Tuesday and Japanese data on Wednesday.

Patricio Martín FXStreet

The GBP/JPY lost ground at the start of the week and currently stands around 181.60. Andrew Bailey’s, Governor of the Bank of England (BoE), hawkish remarks somewhat boosted the GBP while the JPY gained interest in rising Japanese bond yields.

On Monday, Bailey commented that inflation is “unacceptably high”, far from their 2% target, but confirmed that the Monetary Policy Committee expects headline inflation to drop significantly this year. In addition, he commented that he doesn’t know when rates will start to come down and that the committee is closely monitoring the labour market. That being said, Tuesday's Claimant Count and Earnings data will be crucial.

On the other hand, Japanese yields continue to rise after strong Labor Cash Earnings data released last Friday in Japan, suggesting that markets may expect the Bank of Japan to pivot from its dovish stance to a more aggressive one. However, BoJ’s officials may need to gather more data so Machinery Orders and Producer Price Index data, to be released on Wednesday, will be closely monitored.

GBP/JPY Levels o watch

The daily chart suggests a bearish outlook for the short term. The Relative Strength Index (RSI) printed a steep negative slope, and the Moving Average Convergence Divergence printed higher red bars indicating a growing bearish momentum.

Support Levels: 180.10, 179.50 and 17900.

Resistance Levels: 182.70, 183.00,184.00.

GBP/JPY Daily chart

GBP/JPY

Overview
Today last price	181.65
Today Daily Change	-0.84
Today Daily Change %	-0.46
Today daily open	182.49

Trends
Daily SMA20	181.51
Daily SMA50	175.76
Daily SMA100	169.84
Daily SMA200	166.72

Levels
Previous Daily High	183.6
Previous Daily Low	182.02
Previous Weekly High	184.02
Previous Weekly Low	182.02
Previous Monthly High	183.88
Previous Monthly Low	172.67
Daily Fibonacci 38.2%	182.62
Daily Fibonacci 61.8%	183
Daily Pivot Point S1	181.81
Daily Pivot Point S2	181.12
Daily Pivot Point S3	180.23
Daily Pivot Point R1	183.39
Daily Pivot Point R2	184.28
Daily Pivot Point R3	184.97

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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