GBPJPY Technical Analysis | Forexlive

GBP

• The BoE left interest rates unchanged as expected at the last meeting
  removing the tightening bias but reaffirming that they will keep rates high for
  sufficiently long to return to the 2% target.
• The employment report beat expectations across the board
  with a positive revision to the December’s negative payroll figure.
• The UK CPI missed expectations across the board but with
  Services inflation remaining sticky, which continues to support the BoE’s
  patient stance.
• The latest UK PMIs improved from the prior month with the
  Services PMI beating expectations and the Manufacturing PMI missing.
• The latest UK Retail Sales beat expectations across the board
  by a big margin.
• The market expects the first rate
  cut in June.

JPY

• The BoJ kept its monetary policy unchanged as expected at the last meeting
  with interest rates at -0.10% and the 10 year JGB yield target at 0% with 1% as
  a reference cap.
• The Japanese CPI beat expectations although all
  measures eased further from the prior readings.
• The latest Unemployment Rate ticked lower hovering around cycle
  lows.
• The Japanese PMIs improved for both the Manufacturing
  and Services measures although the former remains in contractionary territory.
• The Japanese wage data missed expectations again recently
  although there was a pick up from the prior reading.
• The market expects the BoJ to hike
  rates in Q2.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPJPY continues
to maintain a bullish bias as the price keeps on printing higher highs and
higher lows. The pair has pulled back into the recent swing high level where we
can also find the blue 8 moving average for confluence. This is
where we can expect the buyers to step in with a defined risk below the level
to position for a rally into new highs. The sellers, on the other hand, will
want to see the price breaking lower to position for a drop into the 188.67 support.

GBPJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a key trendline where
the buyers have been leaning onto for a while. The trendline got breached today
but the buyers will have another opportunity to position for new highs at the
190.05 level where we have also the 38.2% Fibonacci retracement level
adding extra confluence. The sellers, on the other hand, will need the price to
break below the 190.05 level to start targeting the 188.67 support.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price diverged with
the MACD
recently which is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, the target for the pullback should be
right around the 109.05 support. Alternatively, if the price were to break
above the downward counter-trendline, the buyers will likely pile in to
position for new highs. The sellers, on the other hand, will likely lean on the
downward trendline to position for a break below the support with a better risk
to reward setup.

Upcoming Events

Tomorrow we will see the Japanese Industrial Production
and Retail Sales and later in the day, the US PCE and the latest US Jobless
Claims figures. On Friday, we conclude the week with the Japanese Unemployment
Rate and the US ISM Manufacturing PMI.