GBP/JPY cross clocked a 9-day low of 145.93 in Asia. The British Pound remains on the back foot after BoE’s Broadbent failed to address the outlook for interest rates, but warned less trade with the EU could hurt the UK economy.
Focus on UK wage growth data
Average earnings excluding bonus is seen rising 1.9% y/y in three months to May compared to 1.7% rise seen in April. Including bonus, the average earnings are seen rising 1.8%, compared to May’s reading of 2.1%.
An uptick in wage growth numbers would strengthen the case for a BoE rate hike and thus lead to a rally in British Pound. On the other hand, a weaker-than-expected wage growth numbers could yield another leg lower in the British Pound. Traders would also take cues from the labor market tightening, although BoE rate hike bets are more dependent on wage price inflation.
GBP/JPY Technical Levels
The cross was last seen trading around 146.05 levels. A break above 146.58 (5-DMA) would open up upside towards 146.85 (1-hour 100-MA) and 146.92 (1-hour 50-MA). On the downside, breach of support at 145.90 (23.6% Fib R of 139.85-147.77) would open doors for 145.14 (supp on 4-hour chart) and 144.48 (100-MA on 4-hour chart).