3 May 2016
GBP/JPY to extend decline below 155.00 handle
The GBP/JPY pair reversed Monday's gain and has dropped back close to 155.00 handle after UK manufacturing PMI showed contraction in manufacturing activity in April.
According to the data released earlier on Tuesday, the Markit/CIPS UK Manufacturing PMI for April dropped its lowest level since February 2013. The manufacturing PMI for April came-in below the 50.0 mark to 49.2 and the reading for March was also revised lower to 50.7 from 51.0 registered previously.
The contraction in manufacturing activity dragged the British Pound lower against most its major counterparts. The GBP/JPY, which is now holding just above 155.00 psychological mark, was slammed from 162.57 on BoJ disappointment, but had managed to hold 155.00 level. Hence, the 155.00 mark now becomes critical level in determining the pair's near-term direction.
Technical levels to watch
Below 155.00 psychological mark support the pair now seems to turn vulnerable to extend its weakness in the near-term, possibly towards testing its next major support near 153.55-50 area.
On the flip side, should the pair manage to hold and rebound from 155.00 level support, the recovery seems to lift the pair back towards 156.00 round figure mark. A sustained strength above 156.00 mark could further boost the pair towards 156.60-70 horizontal resistance, which if conquered opens room for additional recovery towards 158.75-80 zone.
According to the data released earlier on Tuesday, the Markit/CIPS UK Manufacturing PMI for April dropped its lowest level since February 2013. The manufacturing PMI for April came-in below the 50.0 mark to 49.2 and the reading for March was also revised lower to 50.7 from 51.0 registered previously.
The contraction in manufacturing activity dragged the British Pound lower against most its major counterparts. The GBP/JPY, which is now holding just above 155.00 psychological mark, was slammed from 162.57 on BoJ disappointment, but had managed to hold 155.00 level. Hence, the 155.00 mark now becomes critical level in determining the pair's near-term direction.
Technical levels to watch
Below 155.00 psychological mark support the pair now seems to turn vulnerable to extend its weakness in the near-term, possibly towards testing its next major support near 153.55-50 area.
On the flip side, should the pair manage to hold and rebound from 155.00 level support, the recovery seems to lift the pair back towards 156.00 round figure mark. A sustained strength above 156.00 mark could further boost the pair towards 156.60-70 horizontal resistance, which if conquered opens room for additional recovery towards 158.75-80 zone.