GBP/JPY Forecast – British Pound Could Decline Vs Japanese Yen

GBP/JPY Forecast – British Pound Could Decline Vs Japanese Yen

  • – The British Pound struggled to break the $146.20 resistance and declined against the Japanese Yen.
  • – There is a major contracting triangle forming with support at 144.90 on the hourly chart of GBP/JPY.
  • – Today in Japan, the Corporate Service Price Index (CSPI) for May 2018 was released by the Bank of Japan.
  • – The outcome was around the market forecast as the CSPI index increased 1% in May 2018 (YoY).

Japan’s Corporate Service Price Index (CSPI)

Today in Japan, the Corporate Service Price Index (CSPI) for May 2018 was released by the Bank of Japan. The market was positioned for a rise of around 1% in the CSPI compared with the same month a year ago.

 

However, the actual result was around the market forecast as the CSPI index increased 1% in May 2018 (YoY), which was above the last reading of 0.9%. Looking at the Services Producer Price Index (All items <excluding International transportation>), there was an increase of 1.0% from the previous year.

 

The GBP/JPY pair is currently trading below the 145.80 resistance and it is at a risk of a downside break in the near term.

 

GBP/JPY Technical Analysis

The British Pound formed a low at 144.69 and started an upside move against the Japanese Yen. The GBP/JPY pair traded above the 145.00 and 145.20 resistance levels to settle above the 100 hourly simple moving average.

 

GBP/JPY Technical Analysis British Pound Japanese Yen

 

The pair also broke the 50% Fib retracement level of the last decline from the 146.64 high to 144.69 low. However, the upside move was capped by the 146.00-146.20 resistance zone. Moreover, the 76.4% Fib retracement level of the last decline from the 146.64 high to 144.69 low acted as a resistance.

 

The pair dropped back and moved below the 145.80 level and the 100 hourly SMA. At the moment, a connecting bullish trend line with support at 145.30 is holding losses. More importantly, there is a major contracting triangle forming with support at 144.90 on the hourly chart of GBP/JPY.

 

Overall, it seems like the pair may decline below 145.30-20 in the near term and it could even test the triangle support at 144.90 before recovering in the near term.


Also published on Medium.

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