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The British pound was seen correcting higher against the Japanese yen, but every time the GBPJPY pair made an attempt it found sellers. There is a major resistance on the way up for the pair which is protecting upside in the pair. There was a release in Japan today during the Asian session i.e. the Japanese Leading Economic Index was released by the Cabinet Office. The end result was not a positive one, as the Leading Economic Index registered a reading of 105.1 in January 2015. This was a bit lower when we compare it with the last reading, which was pulled down from 105.6 to 105.3. Let us see whether the yen loses ground from here or not.
There is a critical bearish trend line formed on the hourly chart of the GBPJPY pair, which acted as a resistance for the pair every time it traded higher. The pair is currently consolidating just below the highlighted trend line. Moreover, the stated trend line also coincides with the 38.2% fib retracement level of the last leg from the 184.30 high to 182.36 low. A break above the mentioned resistance area could take the pair towards the 100 hour MA, which is sitting right at the 61.8% fib level. The hourly RSI is also around the 50 level suggesting a break is near moving ahead.
If GBPJPY pair moves lower from here, then the last low of 182.36 might act as a support, and if it break then a test of 182.00 level is likely.
Overall, one might consider selling rallies in the GBPJPY pair as long as it is trading below the highlighted trend line.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com/
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