The GBP/JPY pair is still in a bearish area as long it’s moving below the psychological resistance level at 150.00 for 9 consecutive sessions. The pair is n a state of risk avoidance and pushes towards safe heavens led by the JPY with renewed fears of an imminent confrontation between the US and North Korea. The pressure increased on the GBP lately in light of BREXIT negotiation difficulties, based on which the UK Prime Minister, May, again to the EU to revive the BREXIT negotiations in a situation that fits all, after comments from an EU officials that the negotiations with the UK have reached an impasse. This week, the GBP will be the center of attention watching important data from the UK in the form of inflation level and labor work numbers, wages, retail sales and comments on the monetary policy from the Bank of England.
The GBP is still supported by the hawkish monetary policy from the Bank of England, as despite the bank keeping the interest rates as is, the voices are raising among bank members calling for a more hawkish policy and higher interest rates, as stated in Carny’s statements after inflation in the country exceeded the bank’s target of 2% to 2.9%, and the better employment data in the UK, with only the wage average remains without change.
Technically: the GBP/JPY broke the bullish move by breaking below the psychological level at 150.00 and as expected in previous analysis, the move below that level is a strong support of the bearish movement, with the nearest support levels are currently at 146.00, 147.00 and 148.00 respectively. On the bullish side there will be no chance for the pair to advance without a move above the psychologically important level of 150.00.
On the economic data front: the pair is not expecting any important Japanese data today, and will focus on the UK inflation data and comments from the governor of Bank of England. Watch out for the move to safe heave assets led by the JPY in case of any renewed geopolitical fears at any time.
