GBP/JPY takes a breather at the top end of stellar run
-
GBP/JPY
churns
the
waters
just
north
of
206.00. -
UK
and
Japan
data
remain
limited
this
week,
market
flows
set
to
continue. -
UK
industrial
and
manufacturing
output
figures
due
later
in
the
week.
GBP/JPY
failed
to
set
a
new
multi-year
high
on
Tuesday
as
the
pair
churns
on
the
high
end
of
the
206.00
handle.
Long-running
Yen
weakness
has
left
the
pair
stuck
in
the
rafters
of
its
highest
prices
in
16
years.
Data
remains
thin
this
week
for
the
Japanese
Yen
(JPY),
but
broader
markets
continue
to
keep
an
eye
out
for
any
signs
of
direct
market
intervention
from
the
Bank
of
Japan
(BoJ)
that
have
routinely
lamented
the
Yen’s
poor
performance
against
the
majority
of
its
major
currency
peers.
However,
a
rock-bottom
Japanese
reference
rate
and
a
still-wide
rate
differential
between
the
Yen
and
the
rest
of
the
major
currency
bloc
has
left
the
JPY
with
little
direction
to
move
but
down.
UK
data
is
strictly
mid-tier
this
week,
with
GBP
traders
looking
ahead
to
Industrial
and
Manufacturing
Production
figures
due
in
the
back
half
of
the
trading
week
on
Thursday.
A
couple
of
appearances
from
Bank
of
England
(BoE)
policymakers
are
slated
for
early
Wednesday
but
are
not
expected
to
rock
the
policy
boat.
Thursday’s
UK
Industrial
Production
in
May
is
expected
to
rebound
to
0.2%
MoM
from
the
previous
month’s
-0.9%
contraction,
and
UK
Manufacturing
Production
is
forecast
to
recover
0.4%
MoM
from
the
previous
-1.4%
decline.
GBP/JPY
technical
outlook
GBP/JPY
fell
away
from
fresh
16-year
highs
above
206.50
set
earlier
in
the
week,
settling
back
into
familiar
intraday
territory
at
the
206.00
handle.
Technical
pressure
is
still
firmly
pinned
into
the
bullish
side,
but
topside
momentum
is
showing
signs
of
petering
out,
and
progress
in
swing
highs
is
slowly
rapidly
as
bidders
run
out
of
gas.
Spinning
top
daily
candles
are
getting
priced
into
the
Guppy
charts,
and
traders
should
be
on
the
lookout
for
a
retreat
to
the
50-day
Exponential
Moving
Average
(EMA)
near
200.00.
Despite
odds
of
a
near-term
pullback,
the
long-term
trend
heavily
favors
the
bulls,
and
a
rebound
from
major
technical
levels
could
be
on
the
cards
looking
forward.
GBP/JPY
hourly
chart
GBP/JPY
daily
chart
Pound
Sterling
FAQs
The
Pound
Sterling
(GBP)
is
the
oldest
currency
in
the
world
(886
AD)
and
the
official
currency
of
the
United
Kingdom.
It
is
the
fourth
most
traded
unit
for
foreign
exchange
(FX)
in
the
world,
accounting
for
12%
of
all
transactions,
averaging
$630
billion
a
day,
according
to
2022
data.
Its
key
trading
pairs
are
GBP/USD,
aka
‘Cable’,
which
accounts
for
11%
of
FX,
GBP/JPY,
or
the
‘Dragon’
as
it
is
known
by
traders
(3%),
and
EUR/GBP
(2%).
The
Pound
Sterling
is
issued
by
the
Bank
of
England
(BoE).
The
single
most
important
factor
influencing
the
value
of
the
Pound
Sterling
is
monetary
policy
decided
by
the
Bank
of
England.
The
BoE
bases
its
decisions
on
whether
it
has
achieved
its
primary
goal
of
“price
stability”
–
a
steady
inflation
rate
of
around
2%.
Its
primary
tool
for
achieving
this
is
the
adjustment
of
interest
rates.
When
inflation
is
too
high,
the
BoE
will
try
to
rein
it
in
by
raising
interest
rates,
making
it
more
expensive
for
people
and
businesses
to
access
credit.
This
is
generally
positive
for
GBP,
as
higher
interest
rates
make
the
UK
a
more
attractive
place
for
global
investors
to
park
their
money.
When
inflation
falls
too
low
it
is
a
sign
economic
growth
is
slowing.
In
this
scenario,
the
BoE
will
consider
lowering
interest
rates
to
cheapen
credit
so
businesses
will
borrow
more
to
invest
in
growth-generating
projects.
Data
releases
gauge
the
health
of
the
economy
and
can
impact
the
value
of
the
Pound
Sterling.
Indicators
such
as
GDP,
Manufacturing
and
Services
PMIs,
and
employment
can
all
influence
the
direction
of
the
GBP.
A
strong
economy
is
good
for
Sterling.
Not
only
does
it
attract
more
foreign
investment
but
it
may
encourage
the
BoE
to
put
up
interest
rates,
which
will
directly
strengthen
GBP.
Otherwise,
if
economic
data
is
weak,
the
Pound
Sterling
is
likely
to
fall.
Another
significant
data
release
for
the
Pound
Sterling
is
the
Trade
Balance.
This
indicator
measures
the
difference
between
what
a
country
earns
from
its
exports
and
what
it
spends
on
imports
over
a
given
period.
If
a
country
produces
highly
sought-after
exports,
its
currency
will
benefit
purely
from
the
extra
demand
created
from
foreign
buyers
seeking
to
purchase
these
goods.
Therefore,
a
positive
net
Trade
Balance
strengthens
a
currency
and
vice
versa
for
a
negative
balance.
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