GBPJPY Analysis – Key UK Data to Drive the Pound’s Direction!

• Economists predict the US inflation rate will hold steady at 3.0% or dip to 2.9%, with core inflation (excluding food and energy) expected to decline to 3.2%.
• Federal Reserve Governor Mrs. Bowman suggests rate cuts are warranted only if inflation continues to trend downward.
• CME Group data reveals investors are divided on whether the Fed will opt for a 0.50% or 0.25% cut.
• The upcoming US inflation data, due tomorrow and Wednesday, will be crucial in determining the Fed’s next move.
• The Dow Jones is on standby, awaiting key earnings reports from Home Depot (August 13th), Cisco Systems (August 14th), and Walmart (August 15th).

GBPJPY – Key UK Data to Drive the Pound’s Direction

The GBPJPY is trading near its recent average, but the Pound is gaining momentum as vital UK economic data approaches. The Pound’s strength will largely hinge on the results of five key economic releases. Meanwhile, the Japanese Yen has slightly weakened following the Bank of Japan’s dovish tone at their latest press conference. The Yen’s performance will be influenced by the dovish stances of other central banks, including the Fed, Bank of England, and European Central Bank.

This week, the UK will release the following crucial economic data:- Claimant Count Change
– Average Earnings Index
– UK Inflation
– Gross Domestic Product (GDP)
– Retail Sales

The Pound’s value will depend on how the UK economy and inflation have fared over the past month compared to expectations. If UK inflation and GDP exceed forecasts, economists believe the Pound will likely strengthen. However, investors will also be watching UK employment data closely, as the unemployment rate has risen to 4.4%. If this trend continues, the UK’s unemployment rate could reach its highest level in three years, potentially prompting a more dovish response from the Bank of England.

Currently, the Pound is outperforming most currencies, except for the AUD and NZD. Typically, the AUD and NZD lose momentum as the European session begins, but the New Zealand Dollar is also gaining ground ahead of the RBNZ’s rate decision. The GBP is trading 0.20% higher in the Asian session so far. Technical analysts and economists suggest that investors may be increasing their exposure in anticipation of positive economic data throughout the week.

From a technical perspective, GBPJPY is trading above the 75-Period EMA and 100-Period SMA for the first time since July 11th. The RSI is at 59.00, indicating that buyers might be gaining control. Meanwhile, the Japanese Yen index is down 0.42%, showing no immediate conflict, but investors will continue monitoring this as the US releases its inflation data. Prices above 188.405 signal stronger buy opportunities, while a drop below 186.477 will have traders eyeing sell signals.