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16 May 2013
Forex: GBP/JPY mirroring Yen price action
FXstreet.com (London) - The price action overnight in the pair has correlated with the reactions in the Yen with the release of GDP in Japan, the best number recorded for over a year.
Initially, the Japanese currency appreciated as expected, but has shed back some of those gains before the Asian close. The Sterling had been muted over night as well, so moves to the down side had all been USD/JPY related. Business was being done in GBP/JPY at 155.74 early on in the session and pre open of the official London open. London opened and GBP/JPY is losing some ground 25 minutes into the session with a low of 155.58. Cable is now testing the figure 1.5200, with 1.5201 the low in the London open. While the market digests the inflation report of yesterday from the BoE, eyes are towards US GDP coming up today at 13.30BST, and meanwhile the GBP/JPY has some ground to cover having fallen from 156.45 yesterday, losing some 100 pips over the NY and Asian sessions. Technically, the set up is still looking bullish with SMA 200 supporting the 154.91 area with momentum indicators driving the pair higher on the hourly chart. Alternatively to the downside, the market is very long of dollars and that may limit USD/JPY for the time being while Cable is testing the support line and 1.5200 the figure. USD/JPY needs to break through 102.75 for a close in the 103.00 handle which would support GBP/JPY. There is a risk to the downside in Sterling with only a cautious optimistic opinion on the UK economy coming from Kings final inflation report to the world yesterday.
Initially, the Japanese currency appreciated as expected, but has shed back some of those gains before the Asian close. The Sterling had been muted over night as well, so moves to the down side had all been USD/JPY related. Business was being done in GBP/JPY at 155.74 early on in the session and pre open of the official London open. London opened and GBP/JPY is losing some ground 25 minutes into the session with a low of 155.58. Cable is now testing the figure 1.5200, with 1.5201 the low in the London open. While the market digests the inflation report of yesterday from the BoE, eyes are towards US GDP coming up today at 13.30BST, and meanwhile the GBP/JPY has some ground to cover having fallen from 156.45 yesterday, losing some 100 pips over the NY and Asian sessions. Technically, the set up is still looking bullish with SMA 200 supporting the 154.91 area with momentum indicators driving the pair higher on the hourly chart. Alternatively to the downside, the market is very long of dollars and that may limit USD/JPY for the time being while Cable is testing the support line and 1.5200 the figure. USD/JPY needs to break through 102.75 for a close in the 103.00 handle which would support GBP/JPY. There is a risk to the downside in Sterling with only a cautious optimistic opinion on the UK economy coming from Kings final inflation report to the world yesterday.