Forex Market: GBP/JPY daily trading forecast

Yesterday’s trade saw GBP/JPY within the range of 183.54-184.67. The pair closed at 184.50, going up 0.42% on a daily basis, or the largest daily gain since February 17th.

At 7:40 GMT today GBP/JPY was up 0.11% for the day to trade at 184.77. The pair broke the first key daily and the first key weekly resistances and touched a daily high at 185.03 at 2:15 GMT.

Fundamentals

United Kingdom

Gross Domestic Product – second estimate

The second estimate of United Kingdoms GDP probably confirmed the preliminary estimate, released on January 27th, that economy expanded at a rate of 2.7% during the fourth quarter of 2014 compared to the same period a year ago. UK economy grew at an annualized rate of 2.6% in the third quarter last year and by 3.2% in Q2. The latter has been the fastest annual rate of growth since Q3 2007, when the GDP rose 3.3%.

According to the preliminary data, production in agriculture expanded 2.1% year-on-year in Q4, construction output went up 3.5%, while industrial production advanced 0.7%. As far as the sector of services is concerned, distribution, hotels and restaurants expanded 4.7%, transport, storage and communication was up 4.5%, while business services and finance increased 4.0%, according to the Office for National Statistics (ONS).

On a quarterly basis, the second estimate of UK GDP probably also matched the preliminary estimate of a 0.5% growth during Q4, following a 0.7% expansion during the third quarter.

The GDP represents the total monetary value of all goods and services produced by the nation over a specific period of time. What is more, it is the widest indicator of economic activity in the country. The report on GDP is of huge importance for traders, operating in the Foreign Exchange Market, as they will usually look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will usually attract more investors, willing to purchase assets in the UK, while, at the same time, this will increase demand for the pound. Thus, in case the annual growth rate accelerated more than expected, this would boost the appeal of the local currency. The Office for National Statistics is expected to release the second (revised) GDP estimate at 9:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 184.24. In case GBP/JPY manages to breach the first resistance level at 184.93, it will probably continue up to test 185.37. In case the second key resistance is broken, the pair will probably attempt to advance to 186.06.

If GBP/JPY manages to breach the first key support at 183.80, it will probably continue to slide and test 183.11. With this second key support broken, the movement to the downside will probably continue to 182.67.

The mid-Pivot levels for today are as follows: M1 – 182.89, M2 – 183.46, M3 – 184.02, M4 – 184.59, M5 – 185.15, M6 – 185.72.

In weekly terms, the central pivot point is at 183.01. The three key resistance levels are as follows: R1 – 184.57, R2 – 185.84, R3 – 187.40. The three key support levels are: S1 – 181.74, S2 – 180.18, S3 – 178.91.