GBPJPY: BOE Gov Bailey Speaks
Fundamental technical analysis:
Based on the fibonacci retracement analysis, the current price correction is expected to reach the range of 0.618 to 0.5. This correction is aimed at providing liquidity for the upcoming price surge. Moreover, the RSI and EMA indicators suggest that the upward trend is likely to continue.
Market observation:
Earlier today, Jonathan Haskel, a policymaker at the Bank of England (BoE), made comments that supported the Pound Sterling. In an article published in The Scotsman newspaper, Haskel stated that it is crucial to continue to combat the risks of inflation momentum, and that interest rates may need to rise further.
On Tuesday, the UK's Office for National Statistics is expected to release labor market data. Average Earnings Excluding Bonus, which measures annual wage inflation, is predicted to increase to 6.9% in April from 6.7% in March. The markets have fully priced in a 25 basis points (bps) Bank of England rate hike at the next policy meeting on June 22. Therefore, if there is a low wage inflation, it may be difficult for the Pound Sterling to maintain its lead over other currencies, while the positive effect of a stronger-than-expected reading on the currency may be short-lived.
Based on the fibonacci retracement analysis, the current price correction is expected to reach the range of 0.618 to 0.5. This correction is aimed at providing liquidity for the upcoming price surge. Moreover, the RSI and EMA indicators suggest that the upward trend is likely to continue.
Market observation:
Earlier today, Jonathan Haskel, a policymaker at the Bank of England (BoE), made comments that supported the Pound Sterling. In an article published in The Scotsman newspaper, Haskel stated that it is crucial to continue to combat the risks of inflation momentum, and that interest rates may need to rise further.
On Tuesday, the UK's Office for National Statistics is expected to release labor market data. Average Earnings Excluding Bonus, which measures annual wage inflation, is predicted to increase to 6.9% in April from 6.7% in March. The markets have fully priced in a 25 basis points (bps) Bank of England rate hike at the next policy meeting on June 22. Therefore, if there is a low wage inflation, it may be difficult for the Pound Sterling to maintain its lead over other currencies, while the positive effect of a stronger-than-expected reading on the currency may be short-lived.
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