Key Points
- The British Pound traded lower vs the Japanese Yen, and it looks like more downsides are possible.
- There was a support trend line formed on the hourly chart of the GBPJPY pair, which was broken during the downside move.
- In Japan, the Nikkei Manufacturing PMI posted a minor rise from 47.6 to 47.7 in May 2016.
- In the UK, the Nationwide Housing Prices registered a rise of 4.7% in May 2016, compared with the forecast of 4.6%.
Technical Analysis
The British Pound after trading as high as 163.90 vs the Japanese yen failed miserably and fell lower. There was a support trend line formed on the hourly chart of the GBPJPY pair, which was cleared recently by the sellers.
The most important bearish sign is that the pair is below the 100 and 200 hourly simple moving average, pointing towards weakness of the British Pound.
On the downside, a break of the recent low of 157.60 may call for a move towards the 157.20 level.
Japanese Nikkei Manufacturing PMI
Today, the Nikkei Manufacturing PMI, which gives an early snapshot of the health of the manufacturing sector in Japan was reported. The market was expecting no change in the PMI in May 2016. However, there was a minor rise from 47.6 to 47.7 in May 2016.
The report added that “Japanese manufacturing sector showed no signs of improving mid-way through the second of the quarter of 2016, as both production and new orders declined at sharper rates. According to panelists, the aftermath of the earthquakes in one of Japan’s key manufacturing regions continued to weigh heavily on the goods producing sector“.
Although, the report was not impressive, there was no stopping the Japanese Yen and the GBPJPY pair continued its decline.
