Home Markets GBP/JPY falls to three-day lows amid stronger yen after US CPI.

GBP/JPY falls to three-day lows amid stronger yen after US CPI.

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GBP/JPY falls to three-day lows amid stronger yen after US CPI.
  • Japanese yen soars across the board after economic data.
  • The July CPI in the US rises below expectations causing a rise in Treasury bonds.
  • GBP/JPY trims losses after falling to 161.67, the lowest since August 5.

The crossing GBP/JPY lost nearly 200 pips after the release of US inflation data triggered a rally in the Japanese yen across the board. He bottomed out at 161.67 and then went back up to 162-00.

The US CPI ends a period of calm

The annual rate of the US CPI fell from 9.1% to 8.5% in July, against the market consensus of 8.7%. The figures sparked a rally in US stocks and bonds. Expectations continue to point to further tightening by the Federal Reserve, but the doors are open for less aggressive action. Still, market participants see a rate hike of at least 50 basis points at the next meeting.

Improved risk appetite failed to boost GBP/JPY, which retreated amid falling yields and despite GBP/USD rallying above 1.2200.

The GBP/JPY cross was testing key resistance around 163.60 before the report. On the move down, it broke 162.80, which is now the immediate resistance.

Technical indicators favor the downside in the short term. A recovery above 162.80 would see the pound retest 163.80. While below 162.80, the crucial downside zone is 162.00; a break down would expose the next support area at 161.10.

GBP/JPY 4-hour chart

Technical levels

GBP/JPY

Panorama
Last Price Today 162.24
Today’s Daily Change -0.90
Today’s Daily Change % -0.55
Today’s Daily Opening 163.14
Trends
20 Daily SMA 163.71
50 Daily SMA 164.29
100 Daily SMA 163.01
200 Daily SMA 158.56
levels
Previous Daily High 163.68
Previous Daily Minimum 162.63
Previous Maximum Weekly 163.99
Previous Weekly Minimum 159.45
Monthly Prior Maximum 166.34
Previous Monthly Minimum 160.4
Daily Fibonacci 38.2% 163.28
Daily Fibonacci 61.8% 163.03
Daily Pivot Point S1 162.62
Daily Pivot Point S2 162.1
Daily Pivot Point S3 161.57
Daily Pivot Point R1 163.67
Daily Pivot Point R2 164.2
Daily Pivot Point R3

164.72

Source: Fx Street

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