Key Highlights
- The British Pound traded higher from the 150.00-150.20 support area against the Japanese Yen.
- A bearish trend line with current resistance at 152.80 on the 4-hours chart of GBP/JPY is protecting gains.
- The pair must hold the 151.95 and 151.50 support levels to remain in the bullish zone.
- UK’s Consumer Price Index in Dec 2017 posted 3.0% (YoY), similar to the forecast.
GBPJPY Technical Analysis
The British Pound started a fresh upside wave from the 150.19 low against the Japanese Yen. The GBP/JPY pair is currently above a major support area at 151.50.
Considering the 4-hours chart of GBP/JPY, there is a positive price action forming above the 151.50 pivot level. The pair recently traded as high as 153.09 where it found a bearish trend line with current resistance at 152.80.
It moved down and broke the 23.6% Fib retracement level of the last wave from the 150.19 low to 153.09 high. However, there are many supports on the downside such as 151.95 and 151.50.
The 151.95 support is around the 100 simple moving average (red, 4-hour) and the 38.2% Fib retracement level of the last wave from the 150.19 low to 153.09 high.
The 151.50 support is a pivot zone and coincides with the 200 simple moving average (green, 4-hour). An intermediate support is the 50% Fib retracement level of the last wave from the 150.19 low to 153.09 high at 151.64.
Therefore, there is a cluster of supports between 151.50 and 151.95. As long as the pair is above 151.50, it remains supported for an upside push.
Recently, the UK saw the release of the Consumer Price Index for Dec 2017 by the National Statistics. The forecast was slated for a rise of 3.0% compared with the same month a year ago. The actual was similar to the forecast, but down from the last 3.1%.
In terms of the monthly change, the UK CPI was 0.4%, up from the last 0.3%. The result had a negative impact on the GBP/USD and GBP/JPY pairs, but both pairs are still in the bullish zone.
A break above the 152.80 and 153.00 resistance levels in GBP/JPY is required for buyers to gain upside momentum in the near term.
