Key Highlights
- The British Pound fell significantly and tested the 141.00 support area against the Japanese Yen.
- There are two key bearish trend lines formed with resistance near 143.40-50 on the 4-hours chart of GBP/JPY.
- The UK Claimant Count in Nov 2018 changed 21.9K, more than the 13.2K forecast.
- Today, the US Consumer Price Index for Nov 2018 will be released, which is forecasted to rise 2.2% (YoY).
GBPJPY Technical Analysis
The British Pound declined steadily after it failed to break the 150.00 resistance against the Japanese Yen. The GBP/JPY pair traded below the 146.00 and 144.00 support levels, and it recently tested the 141.00 support area.
Looking at the 4-hours chart, the pair recently traded below the 143.50 support area and declined towards 141.00. A new monthly low was formed at 141.17 and the pair settled below the 100 simple moving average (red, 4-hours).
Later, there was an upside correction and the pair recovered above 142.00 and the 23.6% Fib retracement level of the recent decline from the 145.51 high to 141.17 low.
However, there is a strong resistance waiting on the upside near the 143.40 level. Moreover, there are two key bearish trend lines formed with resistance near 143.40-50 on the same chart. The 50% Fib retracement level of the recent decline from the 145.51 high to 141.17 low is also near 143.40.
Therefore, the pair is likely to struggle near the 143.40-50 zone, above which there could be a reversal towards 145.00. On the downside, the key supports are 142.00 and 141.00, followed by 140.00.
Fundamentally, the UK Claimant Count Change for Nov 2018 was released by the National Statistics. The market was looking for a change of 13.2K compared to the last 20.2K.
However, the result was disappointing as there was a change of 21.9K and the last reading was revised to 23.2K. The Claimant Count rate climbed from 2.7% to 2.8%, but the unemployment rate remained stable at 4.1%. The report added:
Estimates from the Labour Force Survey show that, between May to July 2018 and August to October 2018, the number of people in work and the number of unemployed people both increased but the number of people aged from 16 to 64 years not working and not seeking nor available to work (economically inactive) decreased..
After a sharp decline, both GBP/USD and GBP/JPY recovered, but there are many barriers for buyers on the upside waiting to protect further gains.
Economic Releases to Watch Today
- US Consumer Price Index Nov 2018 (MoM) – Forecast 0%, versus +0.3% previous.
- US Consumer Price Index Nov 2018 (YoY) – Forecast +2.2%, versus +2.5% previous.
- US Consumer Price Index Ex Food & Energy Nov 2018 (YoY) – Forecast +2.2%, versus +2.1% previous.
