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Market Analysis

Home » Featured » GBPJPY Primed For Lift-Off

GBPJPY Primed For Lift-Off

Posted by FXTimes in Featured - August 7th, 2015 11:50 am GMT

British Pound Sterling GBPUSD

Technical Bias: Bullish

Key Points

  • British Pound continued to find bids against the Japanese Yen, as there is a monster support formed around 193.20-00.
  • UK trade balance released by the National Statistics registered a trade deficit of £-9.184B in June 2015, compared to the forecast of £-9.200B.
  • UK total trade balance posted a deficit of £-1.601B, compared to the forecast of £-0.885B.
  • GBPJPY showed bearish signs, but it found support around 193.50-40 area.

Technical Analysis

There was a sharp downside move in GBPJPY recently, which resulted in 200 pips loss taking the pair towards 193.20. However, the pair found support around the mentioned area, as there are several hurdles aligned around the stated area. First, it represents the previous swing low. Moreover, there is a bullish trend line formed on the hourly chart of the GBPJPY pair, i.e. acting as a support for the pair.

GBPJPYH1

Currently, the pair is making an attempt to correct higher, but facing a barrier around the 23.6% Fib retracement level of the last drop from the 195.26 high to 193.13 low. Moreover, the 100 hourly simple moving average is also positioned above it.

A break above the 100 SMA could set the pair for more upsides in the near term.

On the downside, the recent low and the trend line support area is very crucial.

UK Trade Balance

Earlier during the London session, there was a major release, as the UK trade balance data, highlighting the balance between exports and imports of goods was released by the National Statistics. The forecast was lined up for a £-9.200B deficit in June 2015, compared to the preceding month. However, the outcome was better than the forecast, as the trade balance registered a deficit of £-9.184B. Furthermore, the total trade balance came in at £-1.601B.

Trade Idea

Buying dips around the trend line and support area is a nice deal in the near term.

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