GBP/JPY Formed a Bearish Pin Bar amid Neutral Fundamental Outlook

Japan – Consumer Confidence

Tomorrow, at GMT 5:00 a.m., the Japanese Cabinet Office will release the monthly national consumer confidence index, which measures the level of a composite index by surveying 5,000 households in the country.

Binary options traders consider the consumer confidence to be a leading indicator of consumers pending in Japan, because people tend to spend more when they feel confident regarding their future financial conditions.

In September, the Japanese consumer confidence index reading came out at 41.7 and the forecast for October is currently set at a similar level, at 41.6.

United Kingdom – Consumer Price Index (CPI)

Tomorrow, at GMT 8:30 a.m., the UK’s Office for National Statistics will release the year-over-year Consumer Price Index  (CPI) figure, which measures the changes in the price of products and services bought by consumers in the country.

Since the CPI comprise of mostly consumer goods, a higher CPI indicates rising consumer prices that account for the bulk of the overall national inflation. Hence, Binary options investors consider the CPI to be a leading indicator of the economy as higher inflation would motivate the central bank to increase interest rates in the future.

Last month, the UK’s Consumer Price Index (y/y) figure remained neutral at 0.0%, and this month, the forecast is once again set at a 0.0% increase.

Trade Recommendation for the GBP/JPYGBPJPYDaily

After forming a bearish pin bar on September 17, the GBP/JPY price declined around 600pips over the last few weeks. During this sharp fall, the GBP/JPY found strong support around the 181.00 level.

The 181.00 level has also provided ample support in early September and it appears that this level would be playing an important role in the coming few weeks.

Last Friday, the GBP/JPY price found resistance around the key psychological pivot zone around the 184.50 level, where the pair formed a minor bearish pin bar. So far, the GBP/JPY price has failed to penetrate below the low of this pin bar.

Both the UK’s CPI and Japanese consumer confidence level likely remain the same as last month, hence the focus would be on the technical aspects of the GBP/JPY this week.

If the price penetrates below Friday’s low, it would likely attract additional bearish momentum in the market and the GBP/JPY price may fall towards the 181.00 level once again.

Under the circumstances, it is recommended that traders consider placing a PUT order for the GBP/JPY with their binary options trading brokers, once the price penetrates below Friday’s low, which is at 183.92.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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