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Dec 03, 2016

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Market Analysis

Home » Technical Analysis » Daily » GBPJPY – Pound May Spike Higher Against Yen

GBPJPY – Pound May Spike Higher Against Yen

Posted by FXTimes in Daily - March 24th, 2016 10:39 am GMT

pound-sterling-us-dollar

Key Points

  • British Pound traded sharply against the Japanese yen recently, but may recover moving ahead.
  • There is a steep bearish trend line formed on the hourly chart of the GBPJPY pair, which might be breached to clear the way for more upsides.
  • UK Retail Sales released by the National Statistics posted a decline of 0.4% in Feb 2016, whereas the forecast was lined up for a decrease of 0.7%.
  • Moreover, the UK Retail Sales ex-fuel also came better than forecast and posted a decline of 0.2% in Feb 2016.

Technical Analysis

The British Pound recently declined towards the 158.50 level, where it found bids against the Japanese yen. The GBPJPY pair is currently making an attempt to break a steep bearish trend line formed on the hourly chart.

GBPJPY

If the pair manages to clear the resistance area, then a move towards the 38.2% Fib retracement level of the last drop from the 161.49 high to 158.44 low is possible.

On the downside, the 158.50-40 support area holds a lot of importance, as a break below it may take GBPJPY towards 158.00.

UK Retail Sales

The UK today saw a couple of major economic releases, including the Retail sales, which measures the total receipts of retail stores by the National Statistics. The forecast was slated for a decline of 0.7% in the sales in Feb 2016, compared with the previous month. However, the outcome was better than expected, as the UK retail sales declined by 0.4%.

The report also added that “Year-on-year estimates of the quantity bought in the retail industry showed growth for the 34th consecutive month in February 2016, increasing by 3.8% compared with February 2015”.

Overall, there lies a great chance of GBPJPY breaking higher in the near term if the bulls gain control.

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