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GBPJPY Hits target 1 & Inline UK Jobs data

Market Analysis
2016-09-14_12-04-41

GBPJPY, Daily              

On Friday (September 9) I posted more thoughts on Sterling this time against the Japanese Yen.…” The GBPJPY has been in a steady uptrend from the August 16 low (below 130.00) to the September 2 high (138.72). That now looks to be fading, following three days of falls followed by a reprieve yesterday.  The pair remained below the 23.6 Fib level from the pre Brexit high and although still above the 20 DMA and with positive SAR a SHORT trade was triggered at 136.18. Target 1 is 134.50 and Target 2 132.80. Support at the 50 DMA and psychological 135.00 level will provide resistance to the move lower.

Sterling continued to be under pressure over night and my Target 1 was hit at 134.500 for a net gain of 168 pips. The UK labour market news today has been in line with expectations (details below) and Sterling has gain a little with cable over 1.3200 and GBPJPY now back over 135.50.

UK labour data met expectations, with the July unemployment rate remaining unchanged at cycles lows of 4.9% and the August claimant count also remaining unchanged at 2.2%. The August claimant count change was +2.4k, a tad worse than the median forecast for a 1.8k rise, while July count was revised to -3.6k from -8.6k. Average earnings in the three months to July came in at 2.3% y/y for the with-bonus figure, and gained 2.1% y.y for the ex-bonus figure, well above the prevailing inflation rate of 0.6% y/y in both cases. The BoE forecast in August that unemployment will rise to 5.5% as a consequence of Brexit-related uncertainties, though there is little sign of this happening thus far, both in official data and with September PMI surveys showing a cross-sector rebound in hiring.

 

 

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Market Analyst

HotForex

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