Checking out this potential consolidation break in the works on GBP/JPY ahead of the monthly employment update from the U.K.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential setup on a potential breakout setup on NZD/USD, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
RBA Meeting Minutes at 1:30 am GMT (Apr. 20)
Japan Tertiary Industry Index at 4:30 am GMT (Apr. 20)
Germany PPI at 6:00 am GMT (Apr. 20)
U.K. Unemployment Rate at 6:00 am GMT (Apr. 20)
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What to Watch: GBP/JPY
Coming up in the London trading session, we’ve got a potential short-term catalyst that could get Sterling moving. The monthly U.K. employment update is up on deck, and with expectations that we’ll see unemployment claims slowed down in March vs. February, it’s possibly that today’s pop higher in GBP/JPY may still have legs to run.
On the one hour chart above, we can see the pair clearly break above the recent resistance area around the 150.75 handle, seemingly a broad move higher in Sterling against the major currencies. This is likely continued optimism that the U.K. economy is recovering from the covid pandemic, and a better-than-expected read from the March U.K. employment data could help the bulls out further.
If that scenario plays out, we’ll be on the looking out for GBP/JPY to move higher, hoping for a pullback to the broken resistance area around 150.75 first. If so, bullish reversal patterns there would confirm GBP/JPY’s bullish bias, especially if we saw disappointing data from Japan and/or a lean in global risk sentiment towards positive.
But if the U.K. employment data severely disappoints, that breakout may turn into a fakeout, making a move below 150.75 one to watch as it may draw in technical traders to may for a play back to the bottom of the consolidation range around 149.60 – 150.00.