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Market Analysis

Home » Featured » GBPJPY – Can The British Pound Bounce?

GBPJPY – Can The British Pound Bounce?

Posted by FXTimes in Featured - February 2nd, 2016 2:19 pm GMT

pound 15

Key Points

  • British Pound is struggling to hold ground against the Japanese Yen after the UK PMI Construction economic release.
  • Today, the UK PMI Construction was released by the Chartered Institute of Purchasing & Supply and Markit Economics.
  • The outcome was disappointing, as there was a decline in the PMI Construction from 57.8 to 55.0 in Jan 2016.
  • The GBPJPY pair is currently trading near a major support trend line, which might play a major role moving ahead.

Technical Analysis

The British Pound recently failed around the 76.4% Fib retracement level of the last leg from the 175.01 high to 172.96 against the Japanese Yen, and traded lower. There is a bullish trend line formed on the hourly chart, which is acting as a support for the GBPJPY pair currently.

GBPJPY

A break below the support trend line may take the GBPJPY pair lower in the short term. It might even test the 100 MA in that case.

On the upside, the 173.80 level can be seen as a resistance area.

UK PMI Construction

Today, the UK PMI Construction, which shows business conditions in the UK construction sector was released by the Chartered Institute of Purchasing & Supply and Markit Economics. The market was expecting a minor decline from the last reading of 57.8 to 57.6 in Jan 2016. However, the outcome missed the mark, as the UK PMI Construction came in at -20K in Jan 2016.

The report stated that “Higher levels of output were recorded across all three broad areas of construction activity monitored by the survey. Commercial work remained the best performing category in January, but the latest upturn was still the slowest since June 2015“.

Overall, the GBPJPY pair remains at a risk, but if there if it survives the trend line support, then it may bounce moving ahead.

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