Follow The Flow: GBPJPY Approaching Key Level
Retail Heavily Short GBPJPY
The retail market is currently more than 70% short GBPJPY making it a prime candidate to monitor for long opportunities. The pair has been grinding higher recently amidst a broader breakout pattern and looks vulnerable to further upside near-term. GBP has been well bid recently on the back recent UK data developments. A jump in wages growth along with still-elevated inflation has put fresh focus on BOE tightening expectations. March CPI was seen holding above the 10% mark, cooling slightly from the prior month but remaining above forecasts for now.
BOJ/BOE Divergence
JPY remains on the backfoot given the BOJ’s continued commitment to maintaining an easing presence in the market. Recently, also, we’ve seen CHF attracting greater safe haven flows amidst periods of risk aversion which has also led to a weaker JPY. While the current backdrop remains the same, GBPJPY looks poised for further upside near-term. Looking ahead, BOE’s Tenreyro speaks later today which will be closely watched. Incoming overnight we then have Japanese national core CPI as well as the latest flash manufacturing PMI data.
Technical Views
GBPJPY
The rally in GBPJPY has seen the market breaking out above the 164.43 level, with price moving higher within a well defined bull channel. Momentum studies have flattened a little recently. However, while price remains within the channel, the focus is on a further push higher and a challenge of the 168.92 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.