GBP/JPY is retesting a range resistance that has held at least twice in the last week!
Will the pair turn lower another time? Or will we see a breakout today?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, Moody’s cut the U.S. government’s outlook from “stable” to “negative,” citing “significantly weakening debt affordability”
BusinessNZ: New Zealand’s services sector weakened from 50.6 to 48.9 in October; “PSI and PMI paint a picture of economic angst” and encourages caution around Q3 GDP readings
Japan’s producer prices grew by 0.8% y/y in October (1.0% y/y expected, 2.2% y/y previous), the slowest since February 2021
Rightmove: Asking prices for U.K. homes dropped by 1.7% m/m in November (from 0.5% uptick in October) and marked its biggest November decline since 2018 amidst a credit-constrained market
Japan’s preliminary machine tool orders drop by another 20.6% m/m in October after 11.2% m/m dip in September
Price Action News
With not a lot of top-tier economic releases in the Asian and early London session, traders had time to notice that USD/JPY is about to retest its previous highs near 151.70. That’s a long way from the 150.00 figure that JPY bulls and bears were side eyeing a few weeks back!
The lack of fresh jawboning from Japan’s officials signaled to traders that it was okay to maybe drag JPY even lower.
And so they did. JPY is trading the lowest against AUD and GBP and is registering the least losses against CAD and CHF.
Upcoming Potential Catalysts on the Economic Calendar:
Canada’s markets out on bank holiday
U.S. Federal budget balance at 7:00 pm GMT
New Zealand’s food price index at 9:45 pm GMT
AU Westpac consumer sentiment at 11:30 pm GMT
AU NAB business confidence at 12:30 am GMT (Nov 14)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
Is the third time the charm for GBP bulls?
GBP/JPY is flirting with the 185.90 level, which is right smack at the resistance zone that held at least twice last week.
As mentioned above, the lack of BOJ jawboning helped drag JPY lower across the board.
Let’s see if the tides turn again for GBP/JPY as the markets prepare for tomorrow’s U.K. jobs release. Word around is that we’ll see weaker labor market numbers from the U.K. which may attract even more BOE rate cut bets.
Speculations of weak U.K. jobs numbers may help GBP/JPY bears who are betting on the range resistance holding another time. A rejection at the pair’s current levels could take GBP/JPY back to its 185.25 mid-range levels if not the 184.75 range support zone.
But that’s not until tomorrow! While we wait for U.K.’s data release, we could see the current anti-JPY themes play out during the U.S. session. This means GBP/JPY possibly heading for the 186.50 area near the R1 (186.63) until a bearish catalyst comes along!
What do you think? Which way will GBP/JPY go in the next trading sessions?