GBP/JPY Breaks Through 157.00 Level ahead of UK Manufacturing Data
GBP/JPY Breaks Through 157.00 Level ahead of UK Manufacturing Data
The GBP/JPY
pair's reversal from 158.00 handle gained momentum, dragging the pair
back below 157.00 level just ahead of the UK manufacturing and
industrial production data.
Since the beginning of this week, the
pair had witnessed a sharp recovery of nearly 400-pips from last week's
low of 153.86. The recovery momentum now seems to face some fresh
supply near 158.00 level on broad safe-haven buying of the Japanese
currency, Yen.
The ongoing concerns over the 'Brexit' coupled
with the recent disappointing PMI reading seems to force traders to
unwind their GBP long bets in expectations of a yet another weak print.
However, should there be a positive surprise, GBP pairs, including the
GBP/JPY pair, are likely to witness an immediate recovery.
Technical levels to watch
The
pair is reversing from the vicinity of 50-day SMA and has now dropped
below 20-day SMA support near 157.10-157.00 handle. A disappointing
production data is likely to drag the pair back towards 156.00 level,
coinciding with 10-day SMA. A follow through selling would negate
possibilities of any further recovery, making the pair vulnerable to
head back towards testing its recent lows support below 155.00
psychological mark (154.85-80 zone).
Conversely, stronger UK data
could lift the pair back above 157.00 mark and if the pair manages to
sustain its strength above 157.00, it seems more likely to move back
towards reclaiming 158.00 handle and eventually test 50-day SMA
resistance near 158.45-50 region.
