Forex Market: GBP/JPY daily trading forecast

Yesterday’s trade saw GBP/JPY within the range of 183.61-191.68. The pair closed at 186.81, losing 2.10% on a daily basis, or the most considerable daily loss since July 8th, when it depreciated 2.12%. The daily low has also been the lowest level since May 8th, when the cross registered a low of 182.48.

At 9:27 GMT today GBP/JPY was up 1.16% for the day to trade at 189.01. The pair touched a daily high at 189.26 at 3:55 GMT.

No relevant macroeconomic reports and/or events are scheduled for announcement out of the United Kingdom and Japan today.

Bond Yield Spread

The yield on Japanese 2-year government bonds went as high as 0.010% on August 24th, or the highest level since August 11th (0.013%), after which it slid to 0.006% at the close to remain unchanged compared to August 21st.

The yield on UK 2-year government bonds climbed as high as 0.679% on August 24th, or the highest level since August 5th (0.689%), after which it fell to 0.677% at the close to gain 17.4 basis points (0.174 percentage point) compared to August 21st. It has been the first gain in the past four trading days.

The spread between 2-year UK and 2-year Japanese bond yields, which reflects the flow of funds in a short term, expanded to 0.671% on August 24th from 0.497% on August 21st. The August 24th yield difference has been the most considerable one since June 26th, when the yield spread was 0.680%.

Meanwhile, the yield on Japan’s 10-year government bonds soared as high as 0.362% on August 24th, after which it slid to 0.358% at the close to remain unchanged compared to August 21st. The yield dropped to as low as 0.349% yesterday, or the lowest level since May 1st (0.342%).

The yield on UK 10-year government bonds climbed as high as 1.834% on August 24th, or the highest level since August 19th (1.901%), after which it slipped to 1.804% at the close to add 10.6 basis points (0.106 percentage point) compared to August 21st. It has been the first gain in the past four trading days.

The spread between 10-year UK and 10-year Japanese bond yields widened to 1.446% on August 24th from 1.340% on August 21st. The August 24th yield difference has been the largest one since August 19th, when the spread was 1.467%.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for GBP/JPY are presented as follows:

R1 – 187.55
R2 – 188.29
R3 (range resistance – green on the 30-minute chart) – 189.03
R4 (range breakout – red on the 30-minute chart) – 191.25

S1 – 186.07
S2 – 185.33
S3 (range support – green on the 30-minute chart) – 184.59
S4 (range breakout – red on the 30-minute chart) – 182.37

By using the traditional method of calculation, the weekly pivot levels for GBP/JPY are presented as follows:

Central Pivot Point – 192.71
R1 – 194.14
R2 – 196.75
R3 – 198.18

S1 – 190.10
S2 – 188.67
S3 – 186.06