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GBP: GBPJPY Back Below 190.00, Downside Vulnerable to Dovish Developments (2/2)

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  • On the other hand, should the Agent’s annual pay settlement survey produce a number at the bottom of the 3-4% range, this could open up the possibility of potential changes to guidance as soon as the March meeting alongside potential additional members preferring sequential cuts.
  • GBPJPY looks vulnerable in this scenario, having depreciated back below 190.00 this morning and now piercing the January lows at 189.34. Bearish momentum has been building for this cross since the start of the year, where fiscal worries prompted a clean break of trendline support around 195.00, a level we have not been back above since.
  • Moving average indicators are in bear mode, with the 20-day EMA providing solid resistance in recent sessions. Positive Japanese wage data has also added to the hawkish BOJ narrative, assisting a 1.5% move lower for GBPJPY from last Friday’s close.
  • Below here, the December low sits at 188.09 and a breach of this level would signal scope for a more significant retracement to 183.72 and 180.11, the lows seen following the global carry unwind episode in August last year.
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  • On the other hand, should the Agent’s annual pay settlement survey produce a number at the bottom of the 3-4% range, this could open up the possibility of potential changes to guidance as soon as the March meeting alongside potential additional members preferring sequential cuts.
  • GBPJPY looks vulnerable in this scenario, having depreciated back below 190.00 this morning and now piercing the January lows at 189.34. Bearish momentum has been building for this cross since the start of the year, where fiscal worries prompted a clean break of trendline support around 195.00, a level we have not been back above since.
  • Moving average indicators are in bear mode, with the 20-day EMA providing solid resistance in recent sessions. Positive Japanese wage data has also added to the hawkish BOJ narrative, assisting a 1.5% move lower for GBPJPY from last Friday’s close.
  • Below here, the December low sits at 188.09 and a breach of this level would signal scope for a more significant retracement to 183.72 and 180.11, the lows seen following the global carry unwind episode in August last year.