The British pound struggle to break the 183.80-184.00 resistance area against the Japanese yen continued this week. The GBPJPY pair failed on many occasions to break higher and currently heading lower. The Japanese Nomura/ JMMA Manufacturing Purchasing Manager Index was released earlier during the Asian session. The outcome was on the lower side, as the Nomura/ JMMA Manufacturing PMI declined from the last revised reading of 52.2 to 51.5. However, the market was expecting it to rise to 52.6. This report failed to ignite losses in the Japanese yen against the British pound. The GBPJPY is currently testing an important support, which might ignite losses in the near term.
There is a crucial bullish trend line formed on the hourly chart of the GBPJPY pair, which the pair is currently testing. We need to see how the British pound react, and whether they can protect downside moving ahead. It is also testing the 50% fib retracement level of the last leg from the 182.60 low to 184.19 high. So, there is a chance of a break higher in the short term. If the pair fails to bounce from the current levels, and breaks the trend line, then a move towards the 100 hour MA is likely. Any further losses could ignite a move towards the 200 hour MA where buyers might appear.
If the GBPJPY pair moves higher from here, then it might challenge the last swing high of 183.80 where sellers could appear.
Overall, one might consider selling with a break in the GBPJPY pair as long as it is trading below the 183.80 level.
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Posted By Simon Ji of IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com/
