GBP/JPY May Continue Downtrend if It Penetrates Below the 183.20 Level

Japan – Final Manufacturing PMI

At GMT 1:35 a.m., the Markit released Japan’s final manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 400 purchasing managers in the country.

Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new orders situation as well as inventory conditions; binary options traders consider this data to be a leading indicator of the overall economic health of the country.

Last month, the Japan’s final manufacturing PMI reading came out at 51.9 and the forecast for September was also set at a reading of 51.9. However, the actual final PMI reading came out slightly lower compared to what the market was exacting, at 51.7.

United Kingdom – Manufacturing PMI

Later, at GMT 8:30 a.m., the Markit released the United Kingdom’s manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 600 purchasing managers in the country.

Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new orders situation as well as inventory conditions; binary options investors consider this data to be a leading indicator of the overall economic health of the country.

Last month, in November, the UK’s manufacturing PMI came out at 51.9 and the forecast for September was set at 51.9 as well. However, the actual figure came out slightly lower compared to last month, at 51.5.

Trade Recommendation for the GBP/JPY

GBPJPYDaily

Since forming a bullish outside bar (BUOB) on April 14, the GBP/JPY price has climbed upwards and formed two major uptrend  lines.

However, on August 24, the GBP/JPY price penetrated and closed below the long-term uptrend line and fell around 785 pips. But, this sudden price drop did not continue and the GBP/JPY immediately started a retraement towards the psychological resistance level around the 187.50 level.

As soon as reaching the resistance at 187.50, it resumed the trend. Today, the GBP/JPY price once again tested last week’s low, at 183.20, but so far failed to penetrate this level.

As the UK’s manufacturing PMI reading came out slightly worse than expected, the GBP/JPY might end up forming a double bottom pattern.

However, if the GBP/JPY price closes below the 183.20 level, it would have a higher probability to continue the downtrend. In that situation, binary options traders may consider placing a PUT order for the GBP/JPY with their US binary options brokers.

Recommended Broker: Cherry Trade

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