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GBP/JPY retreats to 183.00 as markets wait for BoE and Japan’s trade balance

  • GBP/JPY failed to maintain bullish momentum and is falling to the middle zone.
  • Investors seem unwilling to stick to one direction as the BoE nears a landing.
  • Japan’s Trade Balance figures could give a boost to the JPY for Wednesday’s session.

The pair GBP/JPY It is retesting the 183.00 area after failing to regain the 183.50 level in Tuesday’s session.

The British pound (GBP) trading softly in Tuesday’s markets, lacking momentum as investors stay on the sidelines ahead of this week’s central bank releases.

Japan’s trade balance in first place, BOE on the barrel

Japan’s trade balance figures will be published late on Tuesday at 23:50 GMT. Both exports and imports are expected to decline, by -1.7% and -19.4% respectively, and the merchandise trade balance as a whole is expected to decline by 659.1 billion yen.

UK inflation data will be released on Wednesday, with the Consumer Price Index (CPI) at 0.7% in August, down from 0.4% the previous month.

The inflation reading will serve as a prelude to Thursday’s appearance by the Bank of England (BoE), which is expected to raise rates to 5.5%, an increase of 25 basis points from 5.25%.

Inflation continues to plague the UK, even as the British economy continues to falter, and investors will be keeping a close eye on both the inflation figures and the BoE’s monetary policy summary.

On Thursday at 11:00 GMT, the BoE will release its interest rate decision and subsequent statement.

Friday will close the week with BOJ and UK retail figures

Bank of Japan interest rates will be released on Friday and are expected to maintain their negative rate policy of -0.1%. Recent comments from BOJ officials teasing the possible end of the negative rate regime pushed investors into the bullish camp, but the positioning may have been premature.

Japanese authorities were quick to reject these statements outright, pointing out that the Bank of Japan would only raise rates if it was able to keep them above the 2% target, a target that could prove illusory for the BoJ, as it is expected to inflation falls in Japan.

Retail sales data in the United Kingdom will also close the week on Friday. Retail sales are forecast to rise 0.5% in August, following a -1.2% decline in the previous month.

GBP/JPY Technical Outlook

In Tuesday’s session, the pair rejected the 200 hourly SMA, returning it to the 183.50 area after failing to reach 183.50.

Lower highs continue to impact the hourly candles, and the bearish pattern from the late August high at 186.77 remains intact.

On daily candles, GBP/JPY is struggling to build momentum, with the pair struggling to gain a foothold away from the 34-day EMA. The 50-day SMA is steadily rising towards the psychological zone of 180.00, and bidders will try to keep the pair afloat.

The Guppy has closed higher for seven of the last eight months, leaving the pair incredibly overbought and exposed to bearish shocks if the rug is pulled out from under the GBP bulls.

GBP/JPY daily chart

GBP/JPY technical levels


Latest price today 183.11
Today Daily Change 0.32
Today’s daily variation 0.18
Today’s daily opening 182.79
daily SMA20 184.25
daily SMA50 183.17
SMA100 daily 179.56
SMA200 daily 170.93
Previous daily high 183.35
Previous daily low 182.72
Previous weekly high 184.39
Previous weekly low 182.52
Previous Monthly High 186.77
Previous monthly low 180.46
Daily Fibonacci 38.2 182.96
Fibonacci 61.8% daily 183.11
Daily Pivot Point S1 182.56
Daily Pivot Point S2 182.33
Daily Pivot Point S3 181.93
Daily Pivot Point R1 183.18
Daily Pivot Point R2 183.58
Daily Pivot Point R3 183.8

Source: Fx Street

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