Key Points
- The British Pound after trading towards 126.30 found support and traded higher vs the Japanese yen.
- There is a major resistance formed on the hourly chart of GBPJPY at 127.80-128.00, which acted as a barrier on many occasions.
- Today, the UK Consumer Price Index was released by the National Statistics.
- The outcome was above the forecast of +0.8%, as it came in at +1% in Sep 2016.
GBPJPY Technical Analysis
The British Pound recently traded higher from the 126.40 support against the Japanese yen. It traded as high as 127.65, which represents a resistance zone, as can be seen in the hourly chart of the GBPJPY pair.
The GBPJPY pair is also above the 21 hourly simple moving average, and there is a bullish trend line on the downside to act as a support at 127.00.
One may consider entering a buy trade as long as the pair is above the 21 hourly SMA.
UK Consumer Price Index
Today in the UK, the Consumer Price Index, which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services was released by the National Statistics.
The market was expecting a rise of +0.8% in Sep 2016, compared with the same quarter a year ago. The result was above the forecast, as the CPI increased 1%. In terms of the monthly change, there was a rise of 0.2%, which was again above the forecast. The report stated that the “main upward contributors to change in the rate were rising prices for clothing, overnight hotel stays and motor fuels, and prices for gas, which were unchanged, having fallen a year ago”.
Overall, the market sentiment improved for the British Pound, which may push the pair towards the highlighted resistance area at 128.00.
