GBP/JPY seen pushing towards 152.50 after downbeat US NFP
- GBP/JPY trades close to two-week high around 152.20.
- The US economy adds 235,000 jobs in August versus 750,000 expected.
- UK PM Johnson to push for a tax hike.
- Investors eye Japan’s Q2 GDP on Tuesday.
GBP/JPY is consolidating around 152.10 at the time of writing, after pushing towards 152.30 on Friday, as US jobs data disappoints.
The single currency prepares to push towards 152.50, a psychological hurdle.
The US benchmark index S&P 500 futures are trading lower around 4,528 down 0.16%, while the US 10-year yields are high around 1.326% at the time of writing.
An easing risk-on sentiment and rising yields are helping Cable to offset strength in the safe-haven Japanese yen.
On the macro front, the US Nonfarm Payrolls was a huge miss at 235,000 on Friday, largely due to the worsening COVID-19 situation in the country.
The market was expecting a lower print especially after the ADP Manufacturing Employment data, but the actual print was far from consensus.
The US dollar index (DXY) slipped to 91.94 lows despite unemployment decreasing to 5.2% and July payrolls were revised to 1.053 million against 943,000.
The greenback slipped against all majors reversing its earlier gains against the Japanese yen. The GBP/JPY cross had pushed towards 152.30.
The Japanese yen was on the defensive as news of PM Suga’s resignation on September 30, came in during the Asian session. The major was quick to shrug off its earlier losses, on a dismal US NFP.
On the news front, UK PM Boris Johnson is said to be pushing for a tax hike to fund social care.
Despite the cabinet objections, he is said to have strong public support to raise national insurance for an increase in health and social care spending.
Moving forward, investors would keep an eye on Japan’s second-quarter Gross Domestic Product (GDP) set to be released on Tuesday, taking cues on further price action.
Technical levels
GBP/JPY is seen to be consolidating just below the 152.20 marks with immediate support at the 151.80 level.
A push above initial resistance around 152.30 will open the door to challenge next-in-line around the 152.50 level.