Immutable X Solidifies Position With 31% RallyImmutable X Solidifies Position With 31% Rally
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  • The BoE kept interest rates
    unchanged as expected at the last meeting.
  • The central bank is leaning towards
    keeping interest rates “higher for longer”, although it keeps a door open for
    further tightening if inflationary pressures were to be more persistent.
  • BoE Governor Bailey repeated that
    they will keep rates high for long enough to get inflation back to target.
  • The latest employment report beat
    expectations across the board with the unemployment rate ticking lower and wage
    growth ticking higher.
  • The UK CPI today missed expectations
    across the board which favours the BoE’s “on hold” stance.
  • The UK PMIs showed further
    contraction in the services sector, which accounts for 80% of UK’s economic
  • The market doesn’t expect the BoE to
    hike anymore.


  • The BoJ kept its monetary policy basically
    unchanged but formally widened the YCC to 1% on the 10-year JGBs stating that
    it will be a reference cap.
  • Governor Ueda repeated once again
    that they won’t hesitate to take easing measures if needed and that they are
    not foreseeing sustainable price increases.
  • The recent Japanese CPI showed that inflationary pressures remain high with
    the core-core reading hovering at the cycle highs.
  • The Unemployment Rate remained
    unchanged near cycle lows.
  • The Japanese Manufacturing PMI
    matched the prior reading remaining in contraction with the Services PMI
    falling but holding on in expansion.
  • The latest Japanese wage data beat
    expectations. As a reminder the BoJ is focusing on wage growth to decide
    whether to tweak its monetary policy.
  • The market expects the BoJ to keep
    interest rates unchanged at the next meeting as well.

GBPJPY Technical Analysis –
Daily Timeframe


On the daily chart, we can see that GBPJPY broke
above the key resistance around the 183.70 level and continued higher targeting
the high. The pair yesterday broke right through the high following the miss in
the US CPI data which weakened the USD across the board and strengthened the
other currencies.

GBPJPY Technical Analysis –
4 hour Timeframe

GBPJPY 4 hour

On the 4 hour chart, we can see that from a risk
management perspective the buyers will be better off waiting for a pullback
into the trendline where they will also find the confluence with the broken
high, the 38.2% Fibonacci retracement level and the red 21 moving average. This
is where the buyers should step in with a defined risk below the trendline to
position for another rally into new highs.

GBPJPY Technical Analysis –
1 hour Timeframe

GBPJPY 1 hour

On the 1 hour chart, we can see more
closely the bullish setup with the support zones marked with green boxes. Given
that there’s also a good support around the 61.8% Fibonacci retracement level,
the buyers might want to split their long position in half and place orders
both at the 38.2% and the 61.8% Fibonacci retracement levels. The sellers, on
the other hand, will want to see the price breaking below the trendline to
invalidate the bullish setup and position for a drop into the 183.50 level.

Upcoming Events

Today, we have the US
Retail Sales and PPI data with the market likely giving more importance to the
Retail Sales data. Tomorrow, we will see the latest US Jobless Claims figures
where the market will want to see how fast the labour market is softening.
Finally, on Friday we conclude with the UK Retail Sales figures.

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