Can these stronger than expected U.K. jobs figures lift Guppy past its triangle top?
Or will remarks from the next BOJ head spur profit-taking for yen pairs?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/JPY’s bullish breakout on BOJ Governor rumors. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. President Biden to name FOMC’s Brainard as top economic adviser
Japanese GDP falls short at 0.2% growth vs. projected 0.5% expansion in Q4
Australian Feb Westpac consumer sentiment index down by 6.9% vs. previous 5.0% gain
Australia’s NAB business confidence index improved from -1 to +6 in Jan
New Zealand Q1 inflation expectations fell from 3.62% to 3.30% q/q
New Zealand gov’t declared national emergency ahead of Cyclone Gabrielle
Japanese Dec revised industrial production at 0.3% m/m vs. projected 0.1% dip
Japanese gov’t names Ueda as next BOJ Governor
U.K. claimant count fell by 12.9K vs. projected 17.9K increase, 19.7K previous
U.K. jobless rate unchanged at 3.7% as expected in Dec
U.K. average earnings index slipped from 6.4% to 5.9% vs. 6.2% estimate for 3-mo period ending in Dec
U.S. headline and core CPI at 1:30 pm GMT
FOMC member Logan’s speech at 4:00 pm GMT
FOMC member Harker’s speech at 4:30 pm GMT
FOMC member Williams’ speech at 7:00 pm GMT
RBA Governor Lowe’s speech at 1:00 am GMT (Feb. 15)
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What to Watch: GBP/JPY
I’m steering clear of dollar pairs ahead of the U.S. CPI release later today!
Instead I’m turning my attention to this potential triangle breakout on GBP/JPY, as the U.K. printed mostly upbeat jobs figures.
The claimant count change for January showed a surprise decline of 12.9K in joblessness versus the projected increase of 17.9K. This was also a notable improvement from the earlier 19.7K rise in claimants.
However, the unemployment rate didn’t really budge from 3.7% as expected while the average earnings index slowed from 6.4% to 5.9% to signal weaker inflationary pressures.
Technical indicators are looking mixed, too. The 100 SMA crossed above the 200 SMA to suggest that there’s a chance the resistance could break, sending Guppy higher by the same height as the chart pattern.
Then again, Stochastic has been hovering around the overbought zone for a while, so turning lower would mean that selling pressure is picking up. In that case, GBP/JPY could retreat to the triangle support at the 158.50-159.00 zone.
As for the yen, the Japanese currency might still be under pressure due to the appointment of the next BOJ head. Kazuo Ueda has been quoted saying that the current monetary policy stance is appropriate and that more easing might be needed, so his dovish remarks could mean more downside for JPY.