GBP/JPY support after big losse 2013-09-06 15:15 GMT | FXStreet FXstreet (London) - GBP/JPY has finally found some respite at 154.20 post a disappointing period from 156.20 yesterday and into today’s sessions. The pair has disappointed since the boost that came for Sterling from a slight improvement in Markit Services PMI earlier in the week. Today, industrial and manufacturing production beat expectations albeit only marginally which offers the pair some further support. However, the BoE offered much of the same low for longer approach as other Central Banks this week. Overall, for the JPY, Stephen Gallo, Head of FX strategy at BMO explained the better part of the last two decades, fluctuations in the JPY have been a product of three critical elements: intervention to weaken the JPY (1), capital flows (2) and BoJ QE (3). Jane Foley, Senior Currency Strategist at Rabobank noted that the consumption tax debate, BoJ policy and whether Japan will win the right to hold the 2020 Olympics games have all been cited as drivers for the yen this week. “The decision on who will host the 2020 Olympic Games is due at the weekend. Pre-Olympic preparations would be a welcome addition to PM Abe’s attempts to stimulate the Japanese economy. While Japan has been considered a front runner for the Olympic bid, recent concerns about nuclear power plant safety have injected more uncertainty. If Japan were to win the bid it seems likely that it would arguably have a greater incentive to tackle its fiscal position and push ahead with its plans to increase the consumption tax; if only to offset the pre-Olympics spend. While an April hike in the consumption tax would increase the likelihood of further BoJ stimulus in the first months of next year, it is still difficult to conclude that a successful Olympic bid should be a yen negative factor. We remain of the view that while the risk of further BoJ easing next year will contribute to further medium-term appreciation in USD/JPY, that the greatest near-term impetus in this currency pair is likely to come from a better tone in the USD. Without USD strength, USD/JPY will continue to find it difficult to move into a higher range”. GBP/JPY RSI below 30 20 DMA is 153.10, the 50 DMA is 151.85 and the 200 DMA is 147.25. RSI (14) 20.54 and well below the 30 number, indicating that the momentum of this move is well overdone. Supports are ascending from 154.30, while spot is currently 154.60. Resistances are 155.00, 155.40 155.80 and 156.20. GBP/JPY 2013-09-06 15:15 GMT 154.62/154.65 (0.01%) H154.68 L154.63 S3 S2 S1 R1 R2 R3 154.46 154.53 154.58 154.70 154.77 154.82 Trend Index OB/OS Index Bearish Neutral
Posted on: Fri, 06 Sep 2013 17:40:08 +0000
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