UK’s consumer morale slipped to its lowest in four months in October, adding to signs that domestically driven growth is continuing to ease in the final three months of the year.
UK’s economy slowed slightly more than expected in the three months to September, due to a big fall in construction and a continued export-led recession in manufacturing, leaving consumer and investment demand as the main drivers of growth. This week the notable highlights will be the Bank of England (BoE) rate decision.
Last Friday, the Japan central bank kept its monetary policy unchanged, but hinted it could expand its already expansive stimulus in the future to fight slowing exports and other threats to growth. The decision came despite fresh evidence that the Bank of Japan (BoJ) is making little progress in its unprecedented effort to incentive inflation in the world’s third largest economy.
Since the start of the year the currency rose 1.0% and is in a recovery phase since mid-October. The GBPJPY last week initially fell but found enough support to turn things back around managing to close in the green near the open of the week. The stochastic is showing a strong bullish momentum although is still below the 50 mid line.
Expecting an upward move to a weekly resistance at 192.514 on a break above previous week high at 186.721 (scenario 1) or a bounce off the weekly key level at 184.844 could push the currency up to 192.514 (scenario 2).