The main highlights
- GBP / JPY started a strong recovery from the lowest monthly price of 129.30.
- It outperformed a larger bearish trend line with resistance near 131.25 on the 4-hour chart.
- The UK claims figure jumped 856.6K in April 2020, much more than the 150K forecast.
- The UK Consumer Price Index could rise 0.9% in April 2020 (YoY), less than the last 1.5%.
GBP / JPY Technical Analysis
This past week, the British pound extended its decline under the 130.00 zone against the Japanese yen. GBP / JPY traded as low as 129.30 before it started with a strong recovery.
Looking at the 4 hour chart, the pair climbed over many important obstacles such as 130.00 and 130.50 to move into a positive zone. There was a break above the 50% Fib retracement level for the last decline from 133.18 high to 129.30 low.
More importantly, the pair outperformed a larger bearish trend line with resistance near 131.25 on the same chart. It even peaked above the 100 simple moving average (red, 4 hours) and 76.4% Fib retracement level for the last decline from the 133.18 high to 129.30 low.
On the upside, there is a key resistance waiting near the 133.10 level and the 200 simple moving average (green, 4 hours). If the pair continues to rise above 133.00 and 133.10, it may resume the 135.00 resistance zone.
Conversely, GBP / JPY may start a downside correction below 131.50. The first support is seen near 131.20, during which the couple is likely to visit the 130.50 support.
Basically, the UK requirement to change the April 2020 requirement was released by National Statistics. The market was looking for a 150K change in the number of claimants.
However, the result was disappointing as there was a sharp rise of 856.5 K. Conversely, the ILO unemployment rate fell from 4% to 3.9% (3M) (Mar).
In general, GBP / JPY shows positive signs and it could continue to rise above 132.50 and 133.00. Looking at GBP / USD, the pair managed to surpass the 1,2200 resistance zone.
Upcoming financial announcements
- UK Consumer Price Index April 2020 (YoY) – Forecast + 0.9% versus + 1.5% earlier.
- The UK Core Consumer Price Index April 2020 (YoY) – Forecast + 1.5% versus + 1.6% earlier.
- Eurozone CPI for April 2020 (YoY) – Forecast + 0.4% versus + 0.4% previously.
- Eurozone CPI for April 2020 (MoM) – Forecast + 0.3% versus + 0.5% earlier.
- Canadian Consumer Price Index April 2020 (MoM) – Forecast -0.6% versus -0.6% previously.
- Canadian Consumer Price Index April 2020 (YoY) – Forecast -0.1% versus + 0.9% earlier.
- FOMC minutes