Guppy is hanging out at the very top of its descending channel. Will it go for a bounce or a break?
Data from the U.K. has been bleak, but it could still boil down to what Governor Bailey has to say!
But first, here are the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar:
- BOE Governor Bailey’s speech at 8:30 am GMT
- U.S. UoM preliminary consumer sentiment and inflation expectations at 2:00 pm GMT
What to Watch: GBP/JPY
This pair has formed lower highs and lower lows to create a descending channel on its 1-hour chart, and price is sitting right on the resistance.
Will sellers defend this level?
Technical indicators are suggesting that pound bears still have the upper hand, as Stochastic is turning south from the overbought region.
Also, the 100 SMA is below the 200 SMA to confirm that resistance is more likely to hold than to break. The 200 SMA dynamic inflection point even lines up with the channel top to add to its strength as a ceiling!
Earlier on, the U.K. printed mostly downbeat data from its construction, manufacturing, and industrial sectors.
Oh, and don’t forget that BOE Governor Bailey is scheduled to speak at an online event hosted by the Bank for International Settlements, so any remarks related to monetary policy could spur a big reaction from GBP.
Other than that, this yen pair’s price action could also be driven by overall risk appetite. The coast is clear in terms of top-tier data releases, but it always helps to stay on the lookout for sentiment-changing headlines!