GBP/JPY: Current 137.70 (Sunday, March 14, 2010).

Trend:  Correction during strong downtrend.

Please refer daily charts and not short-term charts e.g. hourly charts.

Please note the following:

1) UK: The economic releases for trade balance and manufacturing have not been good. 

2) Japan: There have not been any important economic releases from Japan during the past week but Japan’s economy grew less than initially estimated last quarter.

Analysis:  There are not any stronger fundamental forces to direct the movement currently. The pair had touched its lowest levels of almost a year (since March 12th, 2009). 

Last week we had mentioned “The currency pair should remain under downward pressure for some time but we expect GBP/JPY to move upwards to 138.00 or possibly 139.20 in the coming days before testing a low again”. We still maintain that stand but there are no strong trade configurations at the current price level and we will not be taking a longer-term position for this currency pair..

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For short term trades, please refer to daily technical analysis for GBP/JPY.