Key Points
- The British Pound after setting a minor top near 162.50 vs the Japanese yen started to move down.
- There is a major contracting triangle pattern formed on the hourly chart of the GBPJPY pair, which may be act as a catalyst for the next move.
- Japanese National Consumer Price Index released by the Statistics Bureau posted a decline of 0.3% in April 2016, compared with April 2015.
- Tokyo Consumer Price Index also registered a decline and came in at -0.5% in April 2016.
Technical Analysis
The British Pound recently traded as high as 162.50 vs the Japanese yen, where it found sellers. The GBPJPY pair is currently moving down, and forming a contracting triangle pattern on the hourly chart.
The pair also moved below the 50 hourly simple moving average, which means there is a chance of it breaking the triangle support area in the short term.
A break and close below the triangle support area may open the doors for a move towards the 100 SMA or even the 200 SMA.
Japanese National Consumer Price Index
Today, the Japanese National Consumer Price Index was released by the Statistics Bureau. The market was expecting an improvement in the price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services.
However, the result was disappointing, as there was a decline of 0.3% in the CPI in April 2016, compared with April 2015. Moreover, the Tokyo Consumer Price Index also registered a decline and came in at -0.5% in April 2016.
Overall, there was nothing positive for the Yen buyers, but the market sentiment looks like favoring more gains which is why GBPJPY may move down.
