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- GBP/JPY struggles for clear directions after the first weekly loss in five.
- Japan’s economic assessment, Kuroda’s comments fail to impress sellers amid inaction at the bond markets.
- UK fundamentals keep bears hopeful amid fears of economic slowdown.
- BOE’s Haskel, Mann could be eyed for intraday directions, UK PMIs are the key.
GBP/JPY remains directionless after a three-day uptrend, not to forget snapping the four-week uptrend, as traders await the Bank of England (BOE) policymakers heading into Monday’s London open.
The pair’s latest moves portray indecision of the traders as Japan Government maintains economic assessment for June but an absence of the US bond traders fails to please the yen buyers. Also, the Bank of Japan (BOJ) Governor Haruhiko Kuroda’s comments suggesting the FX rates should reflect fundamentals also failed to gain major attention.
On the other hand, the UK’s downbeat fundamentals and the BOE’s failure to impress bulls seem to underpin the British Pound’s (GBP) weakness. While the British government braces for inflated pay, UK Junior Treasury Minister Simon Clarke warned that if the government gives above-inflation pay awards, they will be in a difficult place, in terms of bringing down inflation.
Earlier in the day, the Financial Times (FT) mentioned that the London City Bosses warn of the UK recession this year.
Amid these plays, the stock futures print mild gains in the UK and Europe amid downbeat closing of the US Treasury yields, mainly due to Friday’s softer US data and inaction afterward.
Moving on, BOE Monetary Policy Committee member Jonathan Haskel and Dr. Catherine L Mann will entertain GBP/JPY traders. Though, major attention will be given to the preliminary readings of the UK PMIs for June amid impending recession fears.
Technical analysis
A clear rebound from the 50-DMA, around 162.65 by the press time, directs GBP/JPY towards the 165.65-70 hurdle before highlighting the “double top” near 168.50.