GBPJPY – Brexit Fears To Keep Pound Under Pressure

Key Highlights

• British Pound after a minor recovery against the Japanese yen traded down and remained under a bearish pressure.
• Brexit fears are in play for the British Pound, which may continue to impact the market sentiment.
• There was a bullish trend line break noted on the hourly chart of the GBPJPY pair.
• In Japan today, the Machinery New orders, released by the Cabinet Office posted a decline of 11% in April 2016, compared with the forecast of -3.8%.
• UK trade balance will be released by the National Statistics today, which is forecasted to post a deficit of £-11.2B in April 2016.

GBPJPY Technical Analysis

The British Pound managed to trade near the 158.00 level against the Japanese yen recently, but it failed to hold the upside momentum and started to move down. During the downside move, the GBPJPY pair broke a bullish trend line on the hourly chart.After the break, the pair tested the 61.8% fib retracement level of the last wave from the 152.93 low to 157.91 high.It looks like the GBPJPY pair may continue to trade lower and may even test the last swing low of 153.00.

UK Goods Trade Balance

Today in the UK, the goods trade balance will be released by the National Statistics. The market is expecting the balance between exports and imports of goods in the UK to post a trade deficit of £-11.2B in April 2016. Moreover, the Trade Balance (non-EU) is forecasted to post a trade deficit of £-3.10B.The GBP might move depending upon the actual result. Any major trade deficit may increase the amount of bearish pressure in the short term.

Japanese Machinery New orders

The Japanese Machinery New orders figure, which are the total value of machinery orders placed at major manufacturers in Japan was released by the Cabinet Office. The market was a decline of 3.8% in orders in April 2016, compared with the previous month.The outcome was disappointing, as the Japanese Machinery New orders posted a decline of 11% in April 2016. Moreover, in terms of the yearly change, there was a decrease of 8.2%.However, there was hardly any impact on the Japanese yen, as it continued to gain vs the British Pound.