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Dec 10, 2016

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Home » Technical Analysis » Daily » GBPJPY – British Pound May Continue To Weaken

GBPJPY – British Pound May Continue To Weaken

Posted by FXTimes in Daily - September 12th, 2016 9:04 am GMT

GBPJPY Pound yen

Key Points

  • The British Pound traded higher recently versus the Japanese yen, but found sellers on the upside.
  • There is a critical bearish trend line formed on the hourly chart of the GBPJPY pair, which acted as a barrier for the buyers.
  • Today, the Japanese Prelim Machine Tool Orders was released by the Japan Machine Tool Builders” Association.
  • The result was disappointing, as there was a decline of 8.4% in August 2016.

GBPJPY Technical Analysis

The British Pound traded down recently against the Japanese yen after finding sellers near 137.00. There is a major critical bearish trend line formed on the hourly chart of the GBPJPY pair, which stopped the upside move in the pair and pushed it down.

GBPJPY Technical Analysis

The pair is also currently attempting a close below the 21 hourly simple moving average, which could ignite further downsides in the near term.

If the GBPJPY pair corrects higher from the current levels, then the same trend line may act as a sell zone. On the downside, the 76.4% Fib retracement level of the last wave from the 134.87 low to 137.00 can act as a support.

Japanese Prelim Machine Tool Orders

Today during the Asian session, the Japanese Prelim Machine Tool Orders, which shows movements in tool orders by manufacturers and indicates business conditions and the overall economic condition in Japan was released by the Japan Machine Tool Builders” Association.

The market was expecting a decline in August 2016, compared with the same month a year ago. The outcome was disappointing, as there was a huge decline of 8.4%. The report was a low risk event, so there was no major impact on the Japanese yen pairs.

Overall, the market sentiment is favoring the Japanese yen, which presents a risk of more losses in the GBPJPY pair in the short term.

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