9 Oct 2013
GBP/JPY testing the handle to the downside
FXstreet.com (London) - GBP/JPY has resumed the downside, dropping sharply on UK data after an initial spike upon Yen negative news hitting the wires across Asia.
GBP/JPY had initially been USD/JPY driven when the yen weakened towards 97.40, on news that President Obama will (finally) nominate Fed Vice Chair Yellen as Chair of the Federal Reserve. Greg Anderson, strategist at BMO said, “Given Japanese policy makers desire to maintain a weak JPY, the Yellen appointment might arguably be seen as a concern (on fears that extended Fed QE would counteract Japanese QE) but overnight trading showed JPY depreciating slightly”. Meanwhile, research teams at TD Securities noted the data releases from the calendar and said, “UK data this morning were all around disappointing, with industrial and manufacturing production as well as trade data for August all notably missing expectations”….the releases knocked GBP/USD lower”. Subsequently GBP/JPY dropped sharply. The teams at TD Securities went onto say, “The BoE tomorrow should be a non-event with no change to the policy rate or the asset purchase program…the one clear risk is that this is the month they decide to start releasing their monthly statements leaving some potential for GBP shock”.
GBP/JPY Levels
The 20 DMA is 157.80, the 50 DMA is 154.80 and the 200 DMA is 149.75. RSI (14) reads 31.37. Supports are ascending from 153.05 and 154.15. Spot is currently 154.95 while resistances are 155.10,156.65, 157.35, 157.55 and 157.85.
GBP/JPY had initially been USD/JPY driven when the yen weakened towards 97.40, on news that President Obama will (finally) nominate Fed Vice Chair Yellen as Chair of the Federal Reserve. Greg Anderson, strategist at BMO said, “Given Japanese policy makers desire to maintain a weak JPY, the Yellen appointment might arguably be seen as a concern (on fears that extended Fed QE would counteract Japanese QE) but overnight trading showed JPY depreciating slightly”. Meanwhile, research teams at TD Securities noted the data releases from the calendar and said, “UK data this morning were all around disappointing, with industrial and manufacturing production as well as trade data for August all notably missing expectations”….the releases knocked GBP/USD lower”. Subsequently GBP/JPY dropped sharply. The teams at TD Securities went onto say, “The BoE tomorrow should be a non-event with no change to the policy rate or the asset purchase program…the one clear risk is that this is the month they decide to start releasing their monthly statements leaving some potential for GBP shock”.
GBP/JPY Levels
The 20 DMA is 157.80, the 50 DMA is 154.80 and the 200 DMA is 149.75. RSI (14) reads 31.37. Supports are ascending from 153.05 and 154.15. Spot is currently 154.95 while resistances are 155.10,156.65, 157.35, 157.55 and 157.85.