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Market Analysis

Home » Technical Analysis » Daily » GBPJPY – Can British Pound Recover Further?

GBPJPY – Can British Pound Recover Further?

Posted by FXTimes in Daily - August 3rd, 2016 12:27 pm GMT

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Key Points

  • The British Pound after trading as low as 133.90 against the Japanese yen started to correct higher.
  • There was a major bearish trend line formed on the hourly chart of the GBPJPY pair, which was broken during the recent upside move.
  • The UK Services PMI was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.
  • There was no change from the last reading of 47.4 in the UK Services PMI in July 2016.

Technical Analysis

The British Pound had a tough time lately against the Japanese yen, as it traded down below the 134.00 level, but later recovered. Recently, the GBPJPY pair moved higher, and cleared a bearish trend line formed on the hourly chart.

GBPJPY

The pair also moved above the 21 hourly simple moving average, which can now act as a support if the pair moves down.

On the upside, a break above the 135.40 resistance is needed for more gains in the short term.

UK Services PMI

Earlier today during the London session, the UK Services PMI, which is an indicator of the economic situation in the UK services sector was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.

The market is not expecting any change from the last reading of 47.4 in July 2016, and the result was as per the forecast. The report added that the “UK service sector registered a fall in business activity in July, according to the latest PMI® survey data from IHS Markit and CIPS. Output and new business both declined for the first time in over three-and-a-half years, and at the fastest rates since early-2009. Consequently, employment in the sector was unchanged since June, ending a three-and-a-half-year period of uninterrupted job creation”.

Overall, the result was not encouraging, but the British pound traded with a positive tone.

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