- The GBP/JPY cross tallies a second consecutive day of losses, falling below the 182.50 area on Friday.
- The 20-day SMA at 181.44 is poised for a retest.
- The Yen gained ground agains most of its rivals on rising Japanese Yields after Labor Cash Earning data.
On Friday, the GBP/JPY cross lost ground as the JPY trades with agains most of its rivals, including the USD, EUR,GBP and AUD. In that sense, the USD/JPY fell to a two-week low following US Nonfarm Payrolls data pressured down by falling American yields while the Japanese rates are rising.
In that sense, the yield on the 2,5 and 10-year Japanese bonds rose to their highest level since May. On the other hand, after Nonfarm Payrolls from the US from June came in lower than expected at 209K vs the 225k expected, US yields retreated. A 1.70% decrease was seen in the 2-year yield, bringing it down to 4.90%, whereas the rates for the 5-year and 10-year yields dropped to 4.29% and 4.02%, respectively.
In that sense, strong Labor Cash Earnings data from Japan released early in the Asian session seem to have fueled the rise in Japanese yields. In that sense, the average income, before taxes, per regular employee in the Asian country rose by 2.5% YoY in May vs the 0.7% expected by the markets. It is worth noticing that the Bank of Japan (BoJ) expressed that its short-term objective was to see wage growth and rising economic activity. That being said, the expectations of a pivot in monetary policy by the BoJ, may continue to strengthen the JPY.
On the British side, their economic calendar had nothing relevant to offer. The focus is next Tuesday’s labour market data, including Claimant Count and Average Earnings figures.
GBP/JPY Levels to watch
The daily chart, suggest a bearish outlook for the short term. Indicators are starting to show weakess with the Relative Strength Index (RSI) pointing south and the Moving Average Convergence Divergence, printing higher red bars. On the bigger picture, the outlook will favour the GBP as long as the cross holds above its main Simple Moving Averages of 20,100, and 200 days.
Support Levels: 181.45 (20-day SMA), 181.00 and 180.50.
Resistance Levels: 182.70, 183.00,184.00.
GBP/JPY Daily chart
-638243514829813971.png)
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
AUD/USD continues to lose ground amid firmer US Dollar
The AUD/USD continues its losing streak, trading around 0.6580 on Thursday following the Reserve Bank of Australia's less hawkish stance, especially after last week's inflation data exceeded predictions. Nevertheless, the RBA acknowledged that recent progress in controlling inflation has stalled, maintaining its stance of keeping options open.
USD/JPY holds positive ground above 155.50 following the BoJ Summary of Opinions
The USD/JPY pair trades in positive territory for the fourth consecutive day around 155.60 during the Asian trading hours on Thursday. However, the fear of further intervention from the Bank of Japan is likely to cap the downside of the Japanese Yen for the time being.
Gold price gains ground, investors await US data, Fedspeak for fresh catalyst
Gold price trades with a positive bias on Thursday amid the absence of top-tier economic data releases at mid-week. However, multiple headwinds, such as the firmer US Dollar and the hawkish comments from the US Federal Reserve are likely to cap the upside of the precious metal in the near term.
President Biden threatens crypto with possible veto of Bitcoin custody among trusted custodians
Joe Biden could veto legislation that would allow regulated financial institutions to custody Bitcoin and crypto. Biden administration’s stance would disrupt US SEC’s work to protect crypto market investors and efforts to safeguard broader financial system.
US inflation data in the market purview
With next week's pivotal US inflation data looming, we're witnessing a stall in stock market momentum and an uptick in US Treasury yields. This shift comes amid murmurs of hawkish sentiment from Fed speak. Indeed the mind games intensify even further as investors cling to their rate cut hopes.