GBP/JPY Could Extend Slides Below 147.0018 October, 2018 by Aayush Jindal in Market Analysis
- The British Pound failed to break the 148.40 resistance and declined against the Japanese Yen.
- There is a major bearish trend line in place with resistance at 148.30 on the 4-hours chart of GBP/JPY.
- Japan’s Merchandise Trade Balance in Sep 2018 posted a surplus of ¥139.6B, better than the ¥-50.0B forecast.
- Today, the UK Retail Sales figure for Sep 2018 will be released, which is forecasted to increase 3.3% (YoY).
GBPJPY Technical Analysis
The British Pound struggled a lot to hold gains above the 149.00 level against the Japanese Yen. As a result, the GBP/JPY pair declined recently and broke the 148.00 support area.
Looking at the 4-hours chart, the recent high was formed at 148.40 before the pair started a downside move. It seems like the pair struggled to clear the 100 simple moving average (red, 4-hours), which is currently at 148.30.
The pair declined below the 50% Fib retracement level of the last wave from the 146.50 low to 148.40 high. If sellers gain momentum below the 147.00 support area, there are chances of an extended slide towards the 146.50 low.
Below the 146.50 low, the pair could test the 1.236 Fib extension level of the last wave from the 146.50 low to 148.40 high at 146.06.
On the upside, the 100 simple moving average (red, 4-hours) at 148.30 is a strong resistance. Moreover, there is also a major bearish trend line in place with resistance at 148.30.
As long as the pair is trading below the 100 SMA and the trend line, it remains at a risk of a slide below the 146.50 low.
Economic Releases to Watch Today
- UK Retail Sales for Sep 2018 (YoY) – Forecast +3.3%, versus +3.3% previous.
- UK Retail Sales for Sep 2018 (MoM) – Forecast -0.8%, versus +0.3% previous.
- UK Retail Sales ex-fuel for Sep 2018 (YoY) – Forecast +3.6% versus +3.5% previous.
- US Initial Jobless Claims – Forecast 206K, versus 214K previous.