- British Pound losses continued this week against the Japanese Yen, and it remains at a risk of more downsides.
- There is an inverse head and shoulders forming on the 4-hours chart of the GBPJPY pair that may ignite losses in the near term.
- In the UK, the Trade Balance released by National Statistics posted a trade deficit of £-2.357B in December 2015, less than the forecast of £-2.600B.
- The UK Goods Trade Balance was also above the forecast, and posted a trade deficit of £-9.917B.
The GBPJPY pair fell recently and traded below a major support trend line on the 4-hours char to ignite a downside move. The pair is now well below the 100, 200 and 50 simple moving average (H4), which is a bearish sign.
Also, there is an inverse head and shoulders forming on the 4-hours chart of the GBPJPY pair, which may act as a catalyst for a downside move.
On the upside, the 167.00 area can be seen as a resistance for gains in GBPJPY.
UK Trade Balance
Today, the UK trade balance, which is a balance between exports and imports of goods was released by the National Statistics. The market was a trade deficit of £-2.600B in December 2015. However, the outcome was above the forecast, as the trade deficit was £-2.357B.
The report added that “December 2015 UK trade release is the first opportunity to analyse 2015 as a whole. The UK’s annual trade deficit reached £34.7 billion in 2015; a widening of £0.3 billion from 2014. Over the same period, the goods deficit widened by £1.9 billion to £125.0 billion. The widening was partially offset by an increase in the services surplus, which rose by £1.5 billion to £90.3 billion”.
Overall, the GBPJPY pair remains at a risk of more losses, and buying should be avoided moving ahead.