GBP/JPY Continues to Flirt with 155.00 Handle Ahead of UK PMI
pair continues to hover around 155.00 important level just ahead of UK
services PMI, awaiting for a break-out in order to confirm its near-term
In last two trading sessions, the pair has been oscillating within 150-pips trading range between 156.00-154.40. Even disappointing UK PMI numbers on Tuesday and Wednesday failed to move the pair beyond this trading range.
On daily chart, the pair seems to be in the process of forming a bullish reversal pattern, inverted head & shoulders, with 155.00 psychological mark as shoulder support. The pair, however, hasn't been able to register any meaningful up-move from this important support and hence, it would be prudent to wait for a decisive break from the current trading range before confirming the pair's near-term direction.
Technical levels to watch
Weakness back below 155.00 handle and a subsequent break through the lower end of the trading range support 154.50-40 area, now seems to 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. Furthermore, decisive break through 155.00 handle would also negate the bullish reversal pattern, turning the pair vulnerable to further downside.
Alternatively, bounce off 155.00 support is likely to get extended towards upper end of the trading range resistance near 156.00 mark, which if conquered should open room for a further up-move towards 158.00 round figure mark. Strength beyond 158.00 mark could face stiff resistance at 50-day SMA, currently near 158.70 level.