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British Pound Trades within a Descending Triangle

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Looking at the British pound trading against the safe haven Japanese yen, the GBP/JPY currency exchange rate is still trading within a descending triangle chart pattern. Price action is also above a key support level keeping buyers hopeful.

The British pound is looking firm around 154.05 yen even though price action is steady heading into Tuesday. The GBP/JPY Forex market is also above a rising trend line in play since late April. However, traders should not bearish signals from both the MACD histogram and relative strength index (RSI).

The economic calendar is a bit volatile today for the currency universe. However, Japan has no key macroeconomic data releases. The United Kingdom will release the private monthly CBI realized sales index.

In the euro area, their largest economy, Germany, is releasing key economic data. The main focus will be on the monthly German Ifo business climate index. Germany will also publish their final their first quarter gross domestic product (GDP) data.

The United States, is publishing their monthly CB consumer confidence index. The world’s largest economy is also releasing monthly housing price index data as well as monthly new home sales data. The Richmond Federal Reserve will publish their monthly manufacturing index.

Daily British Pound Technical Analysis (GBP/JPY)

With that said, the GBP/JPY currency exchange rate seems poised to make a run for the key weekly upside barrier in play at 154.60. However, the British pound needs a sustained close above 155 yen for a meaningful recovery, at this point.

A sustained close above 155 yen opens the door to challenge the February 2012 high price point in play at 156.20.

On the downside, there is immediate technical support lining up at 153.75 yen. A close below this level will challenge the key technical support at 153.50 with the next downside barrier coming into play at the monthly high price point at 152.20 yen.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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