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GBP/JPY slides after BoJ, UK data

Volatility has been unexpectedly low today, despite some major macro events.

The GBP/JPY cross moved lower Tuesday, despite the overall JPY weakness in the FX market after the latest BoJ meeting.

Dovish BoJ, as always

Earlier in the day, the Bank of Japan left monetary policy unchanged and sounded somewhat dovish, failing to live up to the recent hawkish expectations.

The Bank of Japanโ€™s Haruhiko Kuroda reiterated that the central bank would ease policy further without hesitation as needed. However, he also said that the central bank is not considering rate hikes or tweaking current monetary easing.

Thus, the Bank of Japan remains committed to lower interest rates if necessary until 2% inflation is met.

Additionally, Japanese industrial production eased slightly from 7.2% to 7.0% month-on-month. At the same time, the yearly change also weakened and printed 5.1% in November, down from 5.4% previously . On the other hand, capacity utilization was up in November to 8%, from 6.2% in October.

UK labor market data fail to support GBP

Data released earlier by the Office for National Statistics showed that the UK unemployment rate improved as firms hired more people despite the soaring Omicron variant.

In December, the unemployment rate fell to 4.1%, from 4.2% previously . The claimant count change rose from -95,100 to -43,300. There were 29.5 million payrolled employees in the UK in December, up 184,000 from November and 409,000 higher than in February 2020.

On the other hand, wage growth in the three months to November fell to 3.8% year-on-year from 4.3% in the previous month.

From other news, according to the recent survey, over 37% of UK businesses donโ€™t think they will survive due to Brexit, as UKโ€™s Truss braces for key talks with EUโ€™s Sefcovic.

Daily chart seems slightly bearish

It looks like the Pound has failed to reach previous highs in the 158 area, resulting in some profit-taking. Moreover, the MACD indicator has already sent a bearish signal, likely dragging the GBP further lower over the following days . As long as the price trades below 158, bears could try to push the price lower, targeting 155.

Alternatively, if the price shoots above 158, we might see a quick rally to 160.

The significant support is seen at 153, where the 200-day moving average (green line) is. A breakdown below that level could send sterling toward 150.

gbpjpy daily chart GBP/JPY daily chart, Source: Authorยดs analysis, tradingview.com

Marek is a cryptocurrency enthusiast with several years worth of experience in the industry. He has been working with numerous cryptocurrency and FinTech projects, where his main r...

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