GBPJPY – British Pound Poised for Continued Weakness27 September, 2016 by Aayush Jindal in Fundamental Analysis, Market Analysis, Technical Analysis
- The British Pound after failing to break 139.00 versus the Japanese yen started a downward trend.
- There is a bearish trend line on the 4-hours chart of GBPJPY, which is pushing the pair down.
- Today, the BoJ Monetary Policy Meeting Minutes were published by the Bank of Japan.
- The impact was not much on the Japanese yen, as the currency remained in a positive territory.
GBPJPY Technical Analysis
The British Pound after an incredible run towards the 139.00 handle against the Japanese yen found sellers, and started a downward trend. The GBPJPY pair now looks set for further declines since there are many resistances formed on the upside.
The most important one is around a bearish trend line on the 4-hours chart of GBPJPY. An initial resistance is near the 38.2% Fib retracement level of the last drop from the 133.26 high to 129.74 low.
On the downside, the recent low of 129.74 is a support. A break below it may take the pair further lower in the short term. In that case, a test of 129.00 is also likely going forward. One may even consider selling rallies near the trend line with a stop above it.
BoJ Monetary Policy Meeting Minutes
Today, Japan saw a crucial economic release, as the BoJ Monetary Policy Meeting Minutes were published by the Bank of Japan.
The report highlighted that “Japan’s economy continued its moderate recovery trend, although exports and production had been sluggish, due mainly to the effects of the slowdown in emerging economies”.
Overall, there was nothing new in the report from the BoJ. As a result, there was a minor downside move in the Japanese yen. However, the impact may be short-lived, as it remains in the bullish area against most major currencies.
Japan’s Corporate Service Price Index (CSPI)
In an another release, the Japanese Corporate Service Price Index (CSPI), which measures the prices of services traded among companies was released by the Bank of Japan.
The last time increase was 0.4%, and the market was expecting a minor jump in July 2016 as well, compared with the same month a year ago. The result was mixed for July 2016, there was a rise of 0.2% only.