Key Points
- The UK voted to leave the EU in a shocking decision, which ignited a sharp downside move in all British Pound pairs.
- The GBPJPY pair was down from the 160.0 high to 133.00 low, and then recovered back to 140.0.
- The pair remains under a lot of bearish pressure, and may continue to move down.
- The UK Mortgage Approvals published by the British Bankers’ Association (BBA) posted a reading of 42.2K in May 2016, better than the forecast.
Technical Analysis
After the Brexit win, the British Pound was trashed not only against the US Dollar, but also against the Japanese yen. The GBPJPY pair was down and out, and traded from the 160.0 high to 133.00 low before recovering to 140.0.
There was a support trend line on the daily chart of the GBPJPY pair, which may now act as a resistance area if it recovers.
The last low of 133.00 may be tested in the near term if the bearish pressure remains intact for GBPJPY.
Brexit and UK Mortgage Approvals
The financial market was in a shock following the Brexit victory, which ignited a wave of uncertainty and increased investor appetite. The safe havens were seen gaining pace and the British Pound was down and out.
In a low risk event, the Mortgage Approvals, which measure the number of home loans issued by the BBA during the previous quarter was published by the British Bankers’ Association (BBA). The outcome was positive, as the number of home loans issued by the BBA came in at 42.2K in May 2016, better than the forecast of 37.9K.
In short, the GBP may continue to move down, and it’s hard to say where there can be a substantial support area.
