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UK Employment Data Bolstered the Pound, while Trade Concerns Weighed on the Yen
Economic
Forex
Summary:
The British pound maintained its upward trajectory, bolstered by stronger-than-expected UK employment figures, following a six-day rally. Concurrently, the Bank of Japan's latest summary of opinions revealed persistent concerns among officials regarding the risks of a global trade war, despite the tariff agreement with the U.S.
Buy
CLOSEDGBPJPY
End Time
200.017
Entry Price
204.140
TP
196.450
SL
198.555 +0.060 +0.03%
1057
Points
Loss
196.450
SL
198.960
CLOSING
200.017
Entry Price
204.140
TP
Fundamentals
The British pound held near its year-to-date high, consolidating gains after six consecutive days of increases. The pound received a fresh boost on Tuesday from an unexpected drop in July's initial jobless claims.
Data released by the Office for National Statistics showed that the unemployment rate for July met expectations at 4.7%, with a smaller-than-expected decrease in net employment and a decline in initial jobless claims.
Initial jobless claims fell by 6,200 in July, contrasting with the initially reported increase of 25,900 in June, which was later revised to a decrease of 15,500. The market had previously forecast another rise of approximately 20,800 for July.
Furthermore, the net employment figures showed a decrease of 8,000, significantly below the anticipated decline of 20,000, following a drop of 41,000 in June. Wage growth decelerated to its lowest point in nearly a year, with a 4.6% increase in July, down from the previous period's 5%.
These figures validate the Bank of England's Monetary Policy Committee's hawkish stance against interest rate cuts last week and strengthen the case for maintaining stable rates for the remainder of the year.
Conversely, the Japanese yen struggled last week after dovish comments from the Bank of Japan's (BOJ) policymakers. While the BOJ remains committed to continued monetary tightening, recent concerns about trade uncertainties and the impact of U.S. tariffs could hinder the bank from raising rates in the short term. Nevertheless, the BOJ has left the door open for further rate hikes for the rest of the year.
Technical Analysis
The GBPJPY has extended its recent rally, climbing from 195.00 last week to trade near 199.98. The short-term trend has turned bullish as the asset has reclaimed its position above the 20-day SMA.
The Relative Strength Index (RSI) has been oscillating between 40.00 and 60.00 for an extended period, indicating a sideways trend.
A decisive break above 199.98 would resume the broader advance from 184.35. The next target is the 100% projection of 204.14 from 180.00.
On the downside, a break below the minor support at 198.15 would delay the bullish outlook and turn the intraday bias neutral once again.
Trading Recommendations
Trading Direction: Buy
Entry Price: 198.00
Target Price: 204.14
Stop Loss: 196.45
Valid Until: August 27, 2025 23:55:00
Support: 199.00, 198.56, 198.03
Resistance: 199.98, 200.55, 200.72
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