GBP/JPY Bearish! These are the factors that make prices plummet

thecekodok

 Why should traders pay attention to the movement on the chart of the GBP/JPY currency pair at the end of this week? There is a reason why the price pattern is going down.


Two factors are now seen to be influencing both the Pound and the Yen as trading approaches the end of the week.


First is the indication that the market is assessing the monetary policy of the central bank of Japan (BOJ) which is likely to change its policy pattern which was maintained too loose before.


Thus, the expectation of this change prompted the initial strengthening of the Yen value since the Asian session on Thursday yesterday.


Meanwhile, the Pound continued to trade gloomy throughout this week with the focus being on the release of UK economic data.


The UK Gross Domestic Product (GDP) reading for last November published in the European session just now showed slower growth at 0.1% from the previous month's 0.5%, but slightly positive compared to forecasts of a contraction to -0.2%.


The overall including other additional economic data such as industrial production and goods trade balance is judged to be bleak.


Therefore, with the strengthening of the Yen as well as the weak Pound, the price on the GBP/JPY chart clearly shows a bearish pattern since yesterday.



Initially, the price that was flat from the beginning of the week above the 160.500 zone then plunged to reach the concentration level at 157.700 in the New York session yesterday.


A bearish signal is visible on the GBP/JPY price chart when the price starts to move below the Moving Average 50 (MA50) barrier level on the 1-hour time frame.


The bearish pattern continued today (Friday) and as of 3pm local time, the price had reached around 157.00 and showed no significant reaction when the UK economic data was published.


The price drop that continues into the next session is seen to test last week's support zone around 155.500 before the lower target will be directed at the 153.00 zone.


However, in the event of a surge in price before the close of trading this week, a re-examination of the 157.700 level will see the price attempt to break through the MA50 barrier.


If it succeeds, it will be an early signal for the price to climb back higher to the level of 160,500 which was the focus before.