GBPJPY – British Pound Under Renewed Selling Pressure Vs Yen
Aayush Jindal
Key Highlights
The British Pound after trading close to 142.00 against the Japanese yen found sellers.
There GBPJPY pair failed to break a bearish trend line with resistance at 142.00 on the 4-hours chart.
The Q4 2016 Gross Domestic Product preliminary release in the UK by the National Statistics was disappointing, as there was an increase of 2% (YoY), less than the forecast of 2.2%.
Today in the UK, the CBI Distributive Trades Survey for Feb 2017 will be released by the Confederation of British Industry, forecast 0% vs -8% previous.
GBPJPY Technical Analysis
The British Pound was in trouble against the Japanese yen, as it declined below 141.00. The GBPJPY pair recently failed near 142.00, and started a bearish trend.The recent failure near 142.00 was mainly due to a bearish trend line on the 4-hours chart. The pair also failed near the 76.4% Fib retracement level of the last decline from the 142.81 high to 139.62 low. So, it can be seen as a technical failure, igniting a downside move.The pair is now below the 100 simple moving average (H4) and 141.00. If the GBP bears remain in action, there can be a downside extension towards 140.00.
UK Gross Domestic Product Q4 2016
Yesterday, the UK’s second quarterly Gross Domestic Product estimate for Q4 2016 (preliminary) reading was reported by the National Statistics. The forecast was aligned for an increase of 2.2% in the total value of all goods and services produced by the UK in Q4 2016, compared with the same quarter a year ago.However, the result was disappointing, as there was an increase of 2% (YoY). In terms of the quarterly change, there was a rise of 0.7% in Q4 2016, compared with the previous quarter. It was more than the 0.6% forecast.The report mentioned that “UK GDP growth in Quarter 4 2016 saw a continuation of strong consumer spending which is in line with the Retail Sales Index for Quarter 4, which grew by 1.2% (published on 20 January 2017) and strong growth in the output of the services sector”.Overall, the result was mixed, as there was a revision of 0.1 percentage points from the preliminary estimate of GDP. However, the overall impact on the British Pound was negative, as GBPJPY tumbled towards 140.50. If the current market sentiment stays, there are chance of a test of the 140.00 handle in the near term.
The recent failure near 142.00 was mainly due to a bearish trend line on the 4-hours chart. The pair also failed near the 76.4% Fib retracement level of the last decline from the 142.81 high to 139.62 low. So, it can be seen as a technical failure, igniting a downside move.The pair is now below the 100 simple moving average (H4) and 141.00. If the GBP bears remain in action, there can be a downside extension towards 140.00.
The report mentioned that “UK GDP growth in Quarter 4 2016 saw a continuation of strong consumer spending which is in line with the Retail Sales Index for Quarter 4, which grew by 1.2% (published on 20 January 2017) and strong growth in the output of the services sector”.Overall, the result was mixed, as there was a revision of 0.1 percentage points from the preliminary estimate of GDP. However, the overall impact on the British Pound was negative, as GBPJPY tumbled towards 140.50. If the current market sentiment stays, there are chance of a test of the 140.00 handle in the near term.