GBPJPY Technical Analysis – We are at a key resistance zone

<p>UK:</p><ul><li>The BoE <a href="https://www.forexlive.com/centralbank/boe-leaves-bank-rate-unchanged-at-525-vs-550-expected-20230921/">kept interest rates unchanged</a> at the last meeting. </li><li>The central bank is leaning more
towards keeping interest rates “higher for longer” but it kept a door open for
further tightening if inflationary pressures were to be more persistent. </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, but the latest <a href="https://www.forexlive.com/news/uk-august-cpi-67-vs-70-yy-expected-20230920/">UK CPI</a> missed expectations across the board giving
the BoE a bit of relief.</li><li>The latest <a href="https://www.forexlive.com/news/uk-september-final-services-pmi-493-vs-472-prelim-20231004/">UK PMIs</a> showed further contraction, especially in the
Services sector.</li><li>The market doesn’t expect the BoE to
hike anymore.</li></ul><p>Japan:</p><ul><li>The BoJ <a href="https://www.forexlive.com/centralbank/boj-makes-no-change-to-its-major-policy-planks-no-change-to-forward-guidance-20230922/">kept everything unchanged</a> as expected at the last meeting.</li><li>The <a href="https://www.forexlive.com/news/japan-august-inflation-cpi-excluding-fresh-food-energy-43-yy-prior-43-20230921/">Japanese CPI</a> showed that inflationary pressures
remain high with the core-core reading hovering at the cycle highs.</li><li>The <a href="https://www.forexlive.com/centralbank/all-tokyo-area-september-cpi-data-comes-in-way-above-the-2-boj-target-rate-again-20230928/">Unemployment Rate</a> missed expectations although it
matched the previous reading.</li><li>The <a href="https://www.forexlive.com/news/japan-september-preliminary-manufacturing-pmi-486-prior-496-20230922/">Japanese Manufacturing PMI</a> fell further into contraction but
the Services PMI remains in expansion.</li><li><a href="https://www.forexlive.com/centralbank/boj-governor-ueda-will-not-hesitate-to-take-additional-easing-measures-if-necessary-20230922/">BoJ governor Ueda</a> repeated that they will not
hesitate to take additional easing measures if needed and clarified that the
recent comment on “quiet exit” from monetary easing was misinterpreted. </li><li>The <a href="https://www.forexlive.com/centralbank/all-tokyo-area-september-cpi-data-comes-in-way-above-the-2-boj-target-rate-again-20230928/">Tokyo CPI</a>, which is seen as a leading
indicator for national CPI, continues to fall although it remains above the BoJ
target.</li><li>The <a href="https://www.forexlive.com/news/japan-data-august-inflation-adjusted-real-wages-fell-25-yy-20231005/">Japanese wage data</a> last week missed expectations which
is unlikely to lead to a more hawkish BoJ since they want to see a higher wage
growth. </li></ul><p>GBPJPY Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the GBPJPY pair
got close to the 176.32 level after the Japanese intervention but bounced back
strongly as the market faded completely the downward spike. The price is now
getting close to some key levels like the previous <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned resistance</a> around
the 183.00 handle and the downward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>.</p><p>GBPJPY Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see more closely the <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> area
around the 183.00 level where we can find the trendline, the previous support
turned resistance and the 61.8% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level.
This is where we can expect the sellers stepping in with a defined risk above the
trendline to position for another drop into the 176.32 level. The buyers, on
the other hand, will want to see the price breaking above the trendline to keep
charging higher and target new highs. </p><p>GBPJPY Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
are starting to get a <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">divergence</a> with
the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> right
into the trendline, which is usually a sign of weakening momentum often
followed by pullbacks or reversals. This might be just another confirmation
signal for the sellers that the price is likely to start to drop around these
levels. From a risk management perspective, the buyers would be better off
waiting for the price to come into the upward trendline to get back into the
market with a better risk to reward setup. The sellers, on the other hand, will
want to see the price breaking below the upward trendline to increase the
bearish momentum into the 176.32 level. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> the market is likely to focus on the US CPI
report as that’s what might change the expectations around the next FOMC rate
decision. Today, we will see the US PPI data and later in the day the FOMC
Meeting Minutes. Tomorrow, it will be the time for the US CPI report, and at
the same time we will also get the latest Jobless Claims figures. On Friday we conclude
the week with the University of Michigan Consumer Sentiment report. The US data
is important because weak readings might lower global yields and support the
JPY, while strong figures should support global yields and weigh on the JPY.
Moreover, the events in the Middle East could trigger some risk aversion and
support the JPY if the war escalates and we see other Arab countries joining
Hamas against Israel. </p>

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