13 Jan 2015
GBP/JPY to test 180.90 before further sell-off resumes – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, shares that soft Yen and recovering UK Gilt Yields might support gains in GBP/JPY, anticipating the pair to test 180.90 before further sell-off resumes.
Key Quotes
“The GBP/JPY pair fell to a 2-month low today after the data in the UK showed CPI in December at 0.5% year-on-year, which is well below the estimate of 0.7% and down from the November’s print of 1.0%.”
“The cable weakened to a three-day low of 1.5076 following the weak data, although losses have been recovered since the Gilt yields in the UK recovered post the release of the data”
“The recovery in the UK Gilt yields, along with relative weakness in the Yen on recovery in Treasury yields is likely to support gains in the GBP/JPY pair.”
“Technically, the GBT/JPY pair is oversold on daily charts as indicated by the RSI. Plus a technical buying is likely to set-in since the pair has recovered after dipping below the support at 178.70.”
“We can also see a positive price-RSI divergence on the 4-hour chart.”
“Thus, the pair is likely to test 180.90 (100-DMA) levels before resuming further sell-off.”
Key Quotes
“The GBP/JPY pair fell to a 2-month low today after the data in the UK showed CPI in December at 0.5% year-on-year, which is well below the estimate of 0.7% and down from the November’s print of 1.0%.”
“The cable weakened to a three-day low of 1.5076 following the weak data, although losses have been recovered since the Gilt yields in the UK recovered post the release of the data”
“The recovery in the UK Gilt yields, along with relative weakness in the Yen on recovery in Treasury yields is likely to support gains in the GBP/JPY pair.”
“Technically, the GBT/JPY pair is oversold on daily charts as indicated by the RSI. Plus a technical buying is likely to set-in since the pair has recovered after dipping below the support at 178.70.”
“We can also see a positive price-RSI divergence on the 4-hour chart.”
“Thus, the pair is likely to test 180.90 (100-DMA) levels before resuming further sell-off.”