Key Highlights
- The British Pound declined heavily and broke the 142.40 support against the Japanese Yen.
- There is a major bearish trend line formed with resistance at 141.70 on the 4-hours chart of GBP/JPY.
- The pair remains at a risk of a break below the 140.20 and 140.00 support levels.
- Today, the UK Retail Sales figure for July 2018 will be released, which is forecasted to rise 0.2% (MoM).
GBPJPY Technical Analysis
The British Pound started a major downside move from well above 145.00 against the Japanese Yen. The GBP/JPY pair tumbled and broke the 144.00, 143.50, 142.40 and 141.00 support levels.
Looking at the 4-hours chart, the pair traded close to the 140.00 level and formed a low at 140.24. Later, there was an upside correction and the pair moved above the 141.50 level. It even moved above the 50% Fib retracement level of the last drop from the 143.49 high to 140.24 low.
However, the upside move was capped by the previous support at 142.40. Besides, the 61.8% Fib retracement level of the last drop from the 143.49 high to 140.24 low also acted as a resistance.
More importantly, there is a major bearish trend line formed with resistance at 141.70. Therefore, as long as the pair is below the 141.70 and 142.40 levels, it remains in a downtrend. Above 142.40, it could move into a positive zone with the next resistance near 144.00.
On the other hand, if the pair fails to stay above the 140.24 low, it could break the 140.00 support and decline further towards 139.20 in the near term.
Recently, GBP/USD also came under a lot of pressure and declined below the 1.2800 support area. Furthermore, EUR/USD also dropped sharply below the 1.1380 support area.
Economic Releases to Watch Today
- UK Retail Sales for July 2018 (MoM) – Forecast +0.2%, versus -0.5% previous.
- UK Retail Sales ex-fuel or July 2018 (MoM) – Forecast +0.1% versus -0.6% previous.
- Euro Zone Trade Balance June 2018 – Forecast €17.0B versus €16.9B previous.
- US Initial Jobless Claims – Forecast 215K, versus 213K previous.
- US Housing Starts July 2018 (MoM) – Forecast 1.260M, versus 1.173M previous.
- US Building Permits July 2018 (MoM) – Forecast 1.310M, versus 1.273M previous.
