Back
27 Feb 2014
GBP/JPY revisits the channel mid range
FXStreet (Guatemala) - GBP/JPY has managed to find further demand on the 170 handle despite supply that came back in on at 170.20.
GBP/JPY has been driven by the dollar through GBP/USD and USD/JPY post a mixed bag of sentiment for the dollar today and echoing the recent volatility. The cross fell from 170.80 and landed heavily on the 169 handle, making a bottom through 169.20 where it finally attracted some demand. Longer term, in terms of the Japanese economy, The Global Markets Research team at Bank of Tokyo Mitsubishi UFJ, Ltd explained, "The Japanese economy is likely to grow over +1% YoY in FY14, even after the negative repercussion of the sales tax hike in April". They went onto say, "JPY is likely to depreciate, and while Japan’s positive momentum and capital flows may partly cover the global fragility after the sales tax reform, and we expect JPY depreciation to confirm the negative impact of sales tax hike...We maintain our view that JPY depreciation will be driven by domestic players’ yen selling, not dollar buying”. Investec Bank chief economist, Philip Shaw, said “Sterling should remain well supported over the coming months but we continue to view nerves over the Scottish referendum and the General Election as downside risks to the currency”.
GBP/JPY Levels
The 20 DMA is 168.95, the 50 DMA is 170.45 and the 200 DMA is 159.65. RSI (14) reads 58.64. Supports are ascending from 168.30,168.60, 169.10 and 169.90. Spot is 170.46 while resistances are 171.10, 171.85, 172.30 and 173.65.
GBP/JPY has been driven by the dollar through GBP/USD and USD/JPY post a mixed bag of sentiment for the dollar today and echoing the recent volatility. The cross fell from 170.80 and landed heavily on the 169 handle, making a bottom through 169.20 where it finally attracted some demand. Longer term, in terms of the Japanese economy, The Global Markets Research team at Bank of Tokyo Mitsubishi UFJ, Ltd explained, "The Japanese economy is likely to grow over +1% YoY in FY14, even after the negative repercussion of the sales tax hike in April". They went onto say, "JPY is likely to depreciate, and while Japan’s positive momentum and capital flows may partly cover the global fragility after the sales tax reform, and we expect JPY depreciation to confirm the negative impact of sales tax hike...We maintain our view that JPY depreciation will be driven by domestic players’ yen selling, not dollar buying”. Investec Bank chief economist, Philip Shaw, said “Sterling should remain well supported over the coming months but we continue to view nerves over the Scottish referendum and the General Election as downside risks to the currency”.
GBP/JPY Levels
The 20 DMA is 168.95, the 50 DMA is 170.45 and the 200 DMA is 159.65. RSI (14) reads 58.64. Supports are ascending from 168.30,168.60, 169.10 and 169.90. Spot is 170.46 while resistances are 171.10, 171.85, 172.30 and 173.65.