Daily Technical Analysis December 13th 2023

Introduction: 

Welcome to our daily technical analysis of the financial markets, focusing today on GBP/USD and USD/JPY. Let's dissect the latest news, market trends, and crucial price levels to watch out for.  

1. GBP/USD Analysis: 

News Summary: 

The data shows that wage growth in the UK has slightly slowed to 7.3%, but the Bank of England is expected to lower interest rates later than the Federal Reserve or European Central Bank, which would benefit the Pound. BOE will announce its interest rate decision on Thursday, but wage levels remain high. The data of inflation in the UK is relatively high, and there is little evidence of a slowdown in core and service inflation so far, the BOE may counterattack on interest rate decrease expectations.  

Trend Analysis: 

We can see GBP/USD fluctuated and consolidated near the 48 hours moving average on H4 chart. The Bank of England is unlikely to be influenced by new employment data, which does not deter it from abandoning its path, including the possibility of maintaining key interest rates unchanged this week and starting a rate cut cycle from the third quarter of next year. The sell limit can be employed in current technical structure, stop loss is mandatory.  

Today's Key Price Levels:

 Key Support Levels: [1.2420] 

Key Resistance Levels: [1.2700] 

Pivot Points [1.2600]

2. USD/JPY Analysis:  

News Summary: 

The Bank of Japan believes it is not necessary to end the negative interest rate policy this year, but the implied volatility of USD/JPY in two weeks has hardly decreased. Investors have not forgotten the decisions made in December last year and July this year, when the central bank stated 1-2 weeks before the actual meeting that it would not change policies, but ultimately adjusted. The implied volatility of the week covering the December 19th meeting jumped on Tuesday. If option traders are truly confident that nothing will happen, the market's reaction should be much milder.  

Trend Analysis: 

We can see USD/JPY is moving near the 48 hours moving average, while the MACD energy bar is shrinking around the zero axis. Prior to the upcoming Bank of Japan meeting, the short-term implied volatility of USD/JPY may remain high, the buy limit tactic could be placed, stop loss is necessary.   

Today's Key Price Levels: 

Key Support Levels: [144.00] 

Key Resistance Levels: [147.70] 

Pivot Points [144.50]