Key Points
- The British Pound tumbled recently and moved below the 146.70 support against the Japanese Yen.
- There was a break below a major bullish trend line with support at 146.70 on the hourly chart of GBPJPY.
- Today in the UK, the Consumer Price Index for June 2017 was released by the National Statistics.
- The outcome was below the forecast, as the index remained unchanged at 0% (MoM).
GBPJPY Technical Analysis
There British Pound traded nicely towards 147.80 against the Japanese Yen until it faced offers. Later, after disappointing UK’s CPI figure, the GBPJPY pair tumbled and broke the 147.00 support area along with the 21 hourly simple moving average.
The pair also cleared a major bullish trend line with support at 146.70 on the hourly chart and the 50% Fib retracement level of the last wave from the 145.27 low to 147.81 high.
The recent breaks have opened the doors for more losses below 146.50. A break and close below the 61.8% Fib retracement level of the last wave from the 145.27 low to 147.81 high at 146.16 might call for a retest of 146.40.
UK CPI
Today in the UK, the Consumer Price Index for June 2017 was released by the National Statistics. The market was positioned for an increase of 0.2% in the CPI compared with the previous month.
The actual result was below the forecast, as the index remained unchanged at 0%. In terms of the yearly change, there was a rise of 2.6%, less than the forecast of 2.9%. The report mentioned that:
In April 2017, the rate for OOH fell below that of CPI, resulting in CPIH being lower than CPI for the first time since June 2014, a trend that continued into May 2017, when CPI was 0.2 percentage points higher than CPIH. In June 2017, the gap closed so that both measures reported the same rate.
Overall, the GBPJPY pair may continue to struggle and face sellers above 146.60 in the short term.
