Forex Market: GBP/JPY daily forecast

During yesterday’s trading session GBP/JPY traded within the range of 171.72-172.62 and closed at 171.87, losing 0.17% for the day.

At 7:45 GMT today GBP/JPY was down 0.56% for the day to trade at 170.89. The pair touched a daily high at 170.71 at 6:40 GMT (the pairs weakest since June 2nd), breaching the two daily key support levels.

Fundamental view

The deficit on United Kingdom’s trade balance probably narrowed to 8.900 billion GBP in June from a deficit figure of 9.204 billion GBP during the preceding month. This indicator is also known as visible trade balance, because it reflects the difference in value between exported and imported physical goods, without the inclusion of exported and imported services. Since UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the resilience of nation’s economic growth. In case UK trade deficit shrank more than anticipated, this would provide support to the pound. The Office for National Statistics (ONS) will publish the official figure at 8:30 GMT.

At the same time, the deficit on United Kingdom’s trade balance with countries outside the European Union probably narrowed to 3.700 billion GBP in June from a deficit of 3.961 billion GBP in the preceding month. A higher than expected deficit would have a bearish effect on sterling.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 172.07. In case GBP/JPY manages to breach the first resistance level at 172.42, it will probably continue up to test 172.97. In case the second key resistance is broken, the pair will probably attempt to advance to 173.32.

If GBP/JPY manages to breach the first key support at 171.52, it will probably continue to slide and test 171.17. With this second key support broken, the movement to the downside will probably continue to 170.62.