GBP/JPY slips on Machine Orders miss, but climbing back heading into Tokyo

GBP/JPY slips lower in the overnight session/
Pair winds up where it started following data-heavy Wednesday.

Joshua Gibson FXStreet

GBP/JPY is looking for a foothold heading into Tokyo markets, currently trading back into the 149.50 region following a slip to 149.12 on a Japanese Machine Orders miss. The pair ended yesterday flat after a volatile Wednesday, sinking on disappointing UK inflation data, and spiking following upbeat US inflation data. The pair looks set to resume the downward trend from the past two weeks.

The miss for UK inflation data sent GBP/JPY low enough that any gains from the upbeat US numbers was balanced out, resulting in a flat trading day, and the pair is now declining heading into Tokyo following disappointing numbers from Japan, with Machine Orders year-on-year coming in at a diappointing -5.0%, much lower than the forecast of 2.2%, while month-over-month numbers declined by 11.9%, compared with the forecast 2.3% decline.

The UK still has retail sales figures due Friday at 09:30 GMT, but market direction will largely be determined by risk sentiment following the US inflation beat.

GBP/JPY Technicals

Support and resistance for the pair is currently sitting at yesterday's high/low, 147.95 and 150.02 respectively, while long-term resistance rests above at 150.32, and a break below 147.95 will see GBP/JPY trading at eleven-week lows and directly into the 200-day SMA.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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