GBPJPY Jumps to 3-Mth Highs After UK Data
12 September 2022
The Pound roared higher today, bolstered by the optimistic sentiment, pushing the GBPJPY cross to 167 for the first time since early June.
Mixed GBP data
According to data issued earlier by the Office for National Statistics, the GDP increased by 0.2% in July after declining by 0.6% in June, falling short of experts' estimates of a 0.5% increase.
The growth of the GDP, which increased to 0.4% in July from 0.5% the previous month, was mostly driven by the services sector.
Production decreased by 0.3% after falling by 0.9% in June, mostly as a result of a 3.4% decrease in supply of electricity, gas, steam, and air conditioning. After experiencing a 1.4% contraction in June, construction declined by 0.8% in July. This was entirely due to the 2.6% decline in repair and maintenance.
For both output and building, this was the second straight contraction.
According to the ONS, the monthly GDP is now estimated to be 1.1% above its pre-Covid level in February 2020.
Daily chart looks bullish, but tough times ahead
It looks like the recent downtrend/consolidation phase might be over as the Pound jumped above the medium-term downtrend line, changing the trend to bullish. However, bulls will now face immense resistance at previous highs near 168.50.
If they are successful and the price jumps above that level, significant stop losses of short positions would be hit, likely sending the price above the psychological level of 170 and confirming the bullish bias.
On the other hand, the intraday support could be at 166 before the next demand zone in the 165 area.
The RSI indicator also jumped to new swing highs, confirming the bullish momentum.