Key Points
- The British Pound tumbled sharply against the Japanese yen during the past 3 days, but found support recently.
- The GBPJPY pair bounced and traded above a bearish trend line on the hourly chart.
- Today, the UK Net Borrowing report was released by the National Statistics.
- The outcome was positive, as it posted a reading of £10.051B in August 2016, compared with the last reading of £10.300B.
GBPJPY Technical Analysis
The British Pound was seen trading down versus the Japanese yen, as it tested the 130.90 level. The GBPJPY pair remained under pressure until it found buyers and managed to break a bearish trend line on the hourly chart.
However, the upside recovery found sellers near the 21 hourly simple moving average, and currently testing the broken trend line.
The GBPJPY pair has to stay above the trend line if the British Pound buyers wish to take the pair higher in the short term.
UK Net Borrowing
Earlier during the London session, the Net Borrowing, which captures an amount of new debt held by the U.K. governments (the financial deficit in the UK national accounts) was released by the National Statistics). The forecast was lined up for a reading of £10.300B in August 2016.
However, the actual outcome was above the forecast, as it came in at £10.051B in August 2016. The report added that “Public sector net borrowing (excluding public sector banks) decreased by £4.9 billion to £33.8 billion in the current financial year-to-date (April to August 2016), compared with the same period in 2015. Public sector net borrowing (excluding public sector banks) decreased by £0.9 billion to £10.5 billion in August 2016, compared with August 2015”.
Overall, the British Pound has to settle above the broken trend line resistance or there is a chance of another downside move.
