GBPJPY – Critical Juncture Post JPN Industrial Production

Key Highlights

  • British Pound surged higher against the Japanese Yen, but it found resistance around a major resistance zone.
  • Japanese Industrial Production released by the Ministry of Economy, Trade and Industry declined by 2.1% in May 2015, compared with the preceding month.
  • Japanese Capacity Utilization also posted a decline by 3% in May, which was also below the forecast compared with the last reading.

GBPJPY Technical Analysis

The British Pound enjoyed a decent ride against the Japanese Yen, as the GBPJPY pair traded above a major resistance area of 190.00. There was a bearish trend line formed on the hourly chart of the pair, which was breached by buyers. However, the break was crucial, but the upside found resistance around the 61.8% Fib retracement level of the last drop from the 196.86 high to 184.97 low.

The most important point was the fact that the 100 and 200 simple moving averages is also aligned with the mentioned fib level. It looks like there is a major resistance formed around 191.70-80 where sellers might take a stand.

GBPJPY

The recent break was a major one, so if there is a correction, then the pair might find support around the broken trend line. The hourly RSI is above the 50 level, which is a positive sign. On the upside, a break and close above the 200 SMA may take the pair higher in the near term.

Japanese Industrial Production

The Japanese Industrial Production, which measures outputs of the Japanese factories and mines was released by the Ministry of Economy, Trade and Industry. The market was expecting a decline of 2.1% in May 2015, compared with the preceding month. The outcome was in line with the expectation. The year-over-year change was also on the lower side, as the industrial production declined by 3.9%.

There was one more release earlier, as the Tertiary Industry Index, which indicates the domestic service sector in Japan such as information and communication and electricity was be released by the Ministry of Economy, Trade and Industry. There was a decline noted by 0.7% whereas the market was expecting a loss of only 0.2%.

Overall, the reports were lower compared with the forecast. The Japanese Yen lost a lot of ground against most majors during the past couple of sessions.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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