GBP/JPY dips below 200-day MA, eyes UK services PMI release

• GBP remains on the backfoot as BOE May rate hike is off the table.
• Upbeat UK services PMI could yield a corrective rally in GBP/JPY.

GBP/JPY is trading below the 200-day moving average for the first time since April 2 and could find acceptance below the long-term average if the UK March services PMI, due at 08:30 GMT today, prints below estimates.

The data is expected to show the pace of expansion in the service sector improved to 53.5 index points in March from 51.7 index points in February. A below-forecast reading will likely erase the probability of the BOE May rate hike and hence could send the GBP lower across the board. Note, the odds have already dropped sharply following the release of the dismal UK manufacturing PMI and first quarter GDP release.

On the other hand, an above-forecast reading could yield a minor corrective rally in the GBP pairs, although the bearish daily RSI and the descending 5-day MA and the 10-day MA indicate upticks are likely to be short-lived.

GBP/JPY Technical Levels

As of writing, the pair is trading just below the 200-day MA of 149.09. Acceptance below the psychological support of 149.00 may yield a stronger decline to 148.38 (April 2 low) and possibly to 148.00 (psychological level).

On the higher side, a move above 149.09 (200-day MA) would open up upside towards 149.64 (50-day MA) and 149.66 (5-day MA).