Key Points
- The British Pound recently fell against the Japanese yen and closed below 142.00.
- During the downside move, the GBPJPY pair broke a bullish trend line at 142.60 on the hourly chart.
- Today in Japan, the Services Purchasing Managers Index (PMI) was released by Markit Economics.
- The result was on the lower side, as there was a decline from the last reading of 52.3 to 51.9 in Jan 2017.
GBPJPY Technical Analysis
The British Pound was under a minor bearish pressure against the Japanese, as it moved down below the 142.00 support area. There was also a close below the 21 hourly simple moving average, and a bullish trend line at 142.60 on the hourly chart of GBPJPY.
The pair traded as low as 140.70-140.80, which was the previous support as well. It found bids, and currently attempting a recovery from the 140.70 low.
At the moment, it is facing resistance near the 23.6% Fib retracement level of the last decline from the 144.13 high to 140.76 low. The next resistance is at 142.05, which is the 38.2% Fib level of the same wave.
Japanese Services PMI
Today in Japan, the Services Purchasing Managers Index (PMI), which captures business conditions in the services sector was released by Markit Economics. The market was expecting a minor decline in Jan 2017 from 52.3.
However, the result was a bit on the lower side, as there was a decline from the last reading of 52.3 to 51.9 in Jan 2017. The report added that the “headline seasonally adjusted Business Activity Index posted at 51.9 in January, down from 52.3 in December, signalling a robust, albeit slower, expansion in output at Japanese services firms. Although lower than the previous month, the latest reading was sharper than the average seen over 2016”.
Overall, there is a chance of a minor correction in GBPJPY, but the pair may face sellers near the 142.00 and 142.40 resistance levels.
