GBP/JPY Holds 155.00 Support Ahead of UK PMI

GBP/JPY Holds 155.00 Support Ahead of UK PMI

4 May 2016, 10:53
Roberto Jacobs

GBP/JPY Holds 155.00 Support Ahead of UK PMI

The GBP/JPY pair eased from its Asian session peak of 156.15 but has been able to hold its neck just above 155.00 handle ahead of the UK construction PMI release, due for release in a short while from now.

On Tuesday too, the pair reversed from above 156.00 level and dropped below 155.00 handle to 154.42 after the UK manufacturing PMI dropped to its lowest level since Feb. 2013. The 155.00 psychological mad has been an important historic support level. Moreover, on daily chart the pair seems to be forming a bullish reversal inverted head & shoulders pattern with 155.00 level as shoulder support. Hence, 155.00 level become important pivot point in determining the pair's near-term direction.

A disappointing PMI number, which could now force the pair to decisively break below this important support, would negate the formation and increase its vulnerability to continue drifting lower in the near-term.

Technical levels to watch

A sustained break below 155.00 handle and a subsequent break through Tuesday's low support near 154.50-40 area, should drag the pair immediately towards 153.55-50 support area. The fall could further get extended towards April daily closing lows support near 152.00 round figure mark.

Alternatively, should the pair manage to hold and bounce off 155.00 strong support and extend its bounce beyond 156.00 mark, a further up-move towards 158.00 round figure mark could be on the cards. Strength beyond 158.00 mark seems to face stiff resistance at 50-day SMA, currently near 158.70 level.


Share it with friends: