Gbpjpy Turns Green As Pound Gains Strength

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Gbpjpy Turns Green As Pound Gains Strength

GBP/JPY Turns Green Near The 184.00 Level

The GBP/JPY cross turned higher as the GBP continued to show strength against the Japanese Yen. However, the pair continues to experience zig-zag price action amid a mixed market sentiment. Despite this, the cross is still in the green which is an indication of the Pound Sterling's strength against its competition.

In Wednesday's early session, the GBP/JPY fell to 183.20 but eventually recovered and closed the day in the green. During the US trading session, the cross managed to touch 184.40 (daily high), only to fall back to 184.00.

Industrial And Manufacturing Production Declines

On the economic front, most of the data from the UK was below expectations. For starters, industrial production saw a contraction of 0.7%, while the forecast was only for 0.6%.

Although the manufacturing production data was above the forecast, it still continues to dwell in the negative territory, which indicates contraction. As per the data, this index's value during July was -0.8% against the forecast of -1%. In addition, the UK's GDP also declined to 0.5% during July, which was once again a blow to the GBP.

On the technical side, the GBP/JPY managed to touch an impressive daily high near 184.00, which is an achievement in itself. As a result of this bullish momentum, the 100 SMA on the h1 is now very close to turning bullish.

A look at the GBP/JPY daily chair suggests that the bearish trendline, which started from 186.75, is still valid. In addition, the 183.00 level is where the 50 SMA is present and is also pushing the price lower. So if the bulls manage to prop the GBP above these levels, we may finally see a break of the long-term bearish cycle.

On a daily basis (short-term), there's no doubt that the GBP/JPY has managed to stage a recovery. However, the data coming out of the UK is not supportive which puts the recent bullish momentum at risk.

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