Key Points
- The British Pound after testing the 134.00 level against the Japanese yen found sellers and moved down.
- There is a descending channel pattern formed on the hourly chart of the GBPJPY pair, which is currently pushing the pair down.
- Earlier today, the UK Manufacturing Production was released by the National Statistics.
- The outcome was on the negative side, as there was a decline of 0.3% in June 2016, more than the forecast of -0.2%.
Technical Analysis
The British Pound struggled a lot recently against the Japanese yen, especially after trading towards 134.00. The GBPJPY pair started to move down, and currently following a descending channel pattern formed on the hourly chart.
The pair also moved below the 21 hourly simple moving average, which may now act as a resistance area in the near term.
A break below the channel support area may call for a move towards the 132.20 support area where the buyers might appear.
UK Manufacturing Production
Earlier today during the London session, the UK Manufacturing Production, which measures the manufacturing output and is significant as a short term indicator of the strength of UK manufacturing activity was released by the National Statistics.
The forecast was slated for a decline of 0.2% in June 2016, compared with the previous month, but the actual was -0.3%. The report stated that “Total production output is estimated to have increased by 0.1% in June 2016 compared with May 2016. There were increases in 3 of the 4 main sectors, with the only downward contribution coming from manufacturing, which decreased by 0.3%. There were decreases in 9 of the 13 manufacturing subsectors, with the largest contribution coming from the manufacture of transport equipment, which decreased by 1.0%”.
The British Pound looks like struggling at the moment and may continue to trade lower in the near term.
