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27 Mar 2014
GBP/JPY wrestles with 170.00 on profit taking
FXStreet (Guatemala) - GBP/JPY rallied on upbeat data from the UK earlier and has taken a back seat for the time being, wrestling with 170.00.
GBP/JPY got a lift when we saw the upside surprise for today’s retail sales data, with ex-fuel sales up 1.8% M/M in Feb (mkt 0.3%). Strategists at TD Securities noted, “The overall message is that consumer spending trends in the UK are still looking solid. We also had the minutes today from the BoE’s FPC meeting, but no smoking guns there…so far no signs of any impending macroprudential measures to dampen the UK housing market”.
GBP/JPY—Risk, Fiscal Year-end, Taxes
Strategists at TD Securities explained that there are a couple of key events on the radar for the JPY. “The March 31 fiscal year-end and the first stage of a two-step rise in the sales tax (from 5% to 8%) that will be implemented on April 1. The fiscal year-end usually conjures up thoughts of repatriation flows boosting the JPY; we can certainly see evidence of strong repatriation flows back to Japan in the last week of March”. However they said they would rather think investors will be more pre-occupied with the bump up in the sales tax which is likely to slow domestic growth significantly in Q2. “But we also have to acknowledge the chance that more significant losses for equities will drive safe-haven demand for the JPY”.
GBP/JPY Levels
The 20 DMA is 170.00, the 50 DMA is 169.75 and the 200 DMA is 161.50. RSI (14) reads 46.39. Supports are ascending from 167.50, 167.80, 168.15, 168.65, and 169.70, Spot is 169.97 while resistances are 170.55, 171.60 and 172.10.
GBP/JPY got a lift when we saw the upside surprise for today’s retail sales data, with ex-fuel sales up 1.8% M/M in Feb (mkt 0.3%). Strategists at TD Securities noted, “The overall message is that consumer spending trends in the UK are still looking solid. We also had the minutes today from the BoE’s FPC meeting, but no smoking guns there…so far no signs of any impending macroprudential measures to dampen the UK housing market”.
GBP/JPY—Risk, Fiscal Year-end, Taxes
Strategists at TD Securities explained that there are a couple of key events on the radar for the JPY. “The March 31 fiscal year-end and the first stage of a two-step rise in the sales tax (from 5% to 8%) that will be implemented on April 1. The fiscal year-end usually conjures up thoughts of repatriation flows boosting the JPY; we can certainly see evidence of strong repatriation flows back to Japan in the last week of March”. However they said they would rather think investors will be more pre-occupied with the bump up in the sales tax which is likely to slow domestic growth significantly in Q2. “But we also have to acknowledge the chance that more significant losses for equities will drive safe-haven demand for the JPY”.
GBP/JPY Levels
The 20 DMA is 170.00, the 50 DMA is 169.75 and the 200 DMA is 161.50. RSI (14) reads 46.39. Supports are ascending from 167.50, 167.80, 168.15, 168.65, and 169.70, Spot is 169.97 while resistances are 170.55, 171.60 and 172.10.