GBPJPY Technical Analysis – Key trendline in focus

<p>UK:</p><ul><li>The BoE <a href="https://www.forexlive.com/centralbank/boe-raises-bank-rate-by-25-bps-to-525-as-expected-20230803/">hiked by 25 bps</a> as expected at the last
meeting. </li><li>The central bank seems to be leaning
more on the less hawkish side as a key line in the statement was tweaked to
indicate the propensity for a “high for longer” stance rather than keeping with
additional rate hikes. </li><li>Key economic data like the latest <a href="https://www.forexlive.com/news/uk-august-payrolls-change-0k-vs-97k-prior-20230912/">employment report</a> showed a very high wage growth
despite the rising unemployment rate, and the <a href="https://www.forexlive.com/news/uk-july-cpi-68-vs-68-yy-expected-20230816/">UK CPI</a> beat expectations the last time pointing to a
stagflation. </li><li>The <a href="https://www.forexlive.com/news/uk-august-flash-services-pmi-487-vs-510-expected-20230823/">UK PMIs</a> recently missed expectations across the board
with the Services sector plunging into contraction.</li><li>The market expects the BoE to hike
by 25 bps at the upcoming meeting.</li></ul><p>Japan:</p><ul><li>The <a href="https://www.forexlive.com/centralbank/boj-announce-no-change-to-yield-curve-control-ycc-and-no-monetary-policy-change-20230728/">BoJ kept everything unchanged</a> as expected at the last meeting but
tweaked the YCC policy keeping the target band unchanged but giving more
flexibility with a hard cap at 1.00%. </li><li>The <a href="https://www.forexlive.com/news/japan-core-core-cpi-data-comes-in-above-4-again-hits-43-in-july-20230817/">Japanese CPI</a> data surprised to the upside
recently with the core-core reading reaching again the previous high. </li><li>The <a href="https://www.forexlive.com/news/japan-data-july-unemployment-rate-27-expected-25-20230828/">Unemployment Rate</a> surprisingly jumped to 2.7%
recently, although it remains near cycle lows.</li><li><a href="https://www.forexlive.com/centralbank/bank-of-japan-governor-ueda-says-his-focus-is-on-a-quiet-exit-reducing-monetary-easing-20230910/">BoJ Governor Ueda</a> over the weekend said that his
focus is on a quiet exit from the monetary easing and added that the BoJ should
have enough data by year end to decide how to proceed.</li><li>The <a href="https://www.forexlive.com/news/japan-july-real-wages-fall-25-yy-and-household-spending-falls-5-yy-20230907/">Japanese wage data</a> last week showed a slowing in wage
growth, and this is something the BoJ focuses on particularly. </li></ul><p>GBPJPY Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the last leg
higher in GBPJPY was <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a>, which
is usually a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we got a pullback into the key <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> around
the 182.50 level where the buyers stepped in with a defined risk below the
trendline to position for another rally into a new high. A break below the
trendline would open the door for a selloff into the 176.32 swing low level. </p><p>GBPJPY Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we had also
the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
around the trendline, so the buyers had a very good <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> level
there. The recent bounce is not yet indicative of a resumption of the uptrend
as the price has not yet made a new higher high. The <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> though
have crossed to the upside again, so that might be an early sign of an incoming
uptrend. </p><p>GBPJPY Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
price was diverging with the MACD right when it fell into the trendline and the
38.2% Fibonacci retracement level. That was another confirmation for the buyers
that a reversal might be in the cards. The price will need to break above the
recent swing high around the 184.50 level to change the market structure into
an uptrend and give the buyers back control. The sellers, on the other hand,
will want to wait for the price to break through the major trendline to pile in
and target the 176.32 level. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> we have many important events. Today is the US
CPI Day, which is expected to show an increase in headline inflation due to
higher energy prices but further disinflation in the core measure. Tomorrow, we
will see the latest US Jobless Claims, PPI and Retail Sales data. Finally on
Friday, we get the University of Michigan Consumer Sentiment report. Strong
data is likely to boost global yields and send the GBPJPY higher, while weak
readings should have the opposite effect. </p>

This article was written by FL Contributors at www.forexlive.com.