GBPJPY Testing Critical Support Area

Key Highlights

  • British pound surged higher against the Japanese yen, but stalled around 178.00 area.
  • GBPJPY is correcting lower, and approaching a monster support area where buyers might appear.
  • Japanese Consumer Confidence released by the Cabinet Office posted a minor increase from the last reading of 40.9 to 41.7 in March 2015.

Japanese Consumer Confidence

Earlier during the Asian session, the Japanese Consumer Confidence measuring the level of sentiment that individuals have in economic activity was released by the Cabinet Office. There was something to cheer for the yen buyers, as the Japanese Consumer Confidence rose from the last reading of 40.9 to 41.7 in March 2015. According to the report published, the confidence was based on a survey covering 8,400 households, which are having one, and two or more persons. The last reading was also revised up from 40.7 to 40.9.

Japenese CC

There was no major reaction noticed in pairs such as USDJPY, EURJPY and GBPJPY. However, it looks like there is a slight bearish pressure emerging on the yen pairs in the near term.

Technical Analysis

As mentioned the GBPJPY pair was seen gaining bids, as it traded higher to test an important swing area of 178.00. The pair is correcting lower, and heading towards a bullish trend line formed on the hourly chart. The highlighted trend line might act as a barrier for sellers, as it is also coinciding with the 23.6% fib retracement level of the last leg from the 175.68 low to 178.00 high. A break below the same could take GBPJPY towards the 200 hourly simple moving average which is sitting above the 38.2% fib level.

GBPJPY 04.17.2015

Alternatively, if it moves higher, then initial hurdle would be around the recent pivot of 178.00. Only an hourly close above the mentioned level could ignite more gains in the near term.

UK Employment Report

Today, there are several important risk events lined up in the UK, including the employment report. The Claimant Change showing the number of unemployment people in the UK will be released by the National Statistics.

The forecast is lined up for a change of -28K in March 2015, compared to the last change of -31K. Moreover, the UK unemployment rate is expected to decrease from 5.7% to 5.6%.

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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