GBP/JPY, GBP/USD Set for Test of Highs or Major Breakdown
- British Pound benefits from higher running housing price data.
- GBPJPY, GBPUSD hold critical longer-term support for now.
- Forex economic calendar sees US Consumer Price Index on Tuesday.
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The British Pound may be facing a critical test over the coming days, as it faces long-term trend support versus the Japanese Yen and US Dollar amid prices struggling near yearly highs.
In the case of GBPJPY, we've seen a number of runs towards the December highs short of ¥175.00 in 2014 that have thus far produced a series of lower highs, and now the uptrend from the November 2012 is in question. A range has formed between 169.50 and 170.50 the past several days to reference for longs or shorts.
For GBPUSD, the uptrend from the July 2013 low could be broken but that would require a more concerted move lower through 1.6620/30. Although today's UK inflation data came in mixed (with some true surprising upside in the housing figures), a move lower will require a further turnaround in US economic data. Yesterday's release of the March US Advance Retail Sales data is the first building block the US Dollar needs to 'bottom out.'
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail firstname.lastname@example.org
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