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We’re about to see the U.K. GDP reading for Q4 2021 today!

Will we see a strong read that might allow Guppy to stay in its uptrend?

Before moving on, ICYMI, yesterday’s watchlist checked out USD/JPY’s bearish divergence prior to the U.S. CPI release. Be sure to check out if it’s still a valid trade!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. CPI post largest annual inflation gain in 40 years

Fed official Bullard favors full 1% hike by July

New Zealand inflation expectations surge from 2.96% to 3.27%

New Zealand credit card spending up 3.0% vs. 0.6% consensus

Japanese markets closed for a holiday

RBA Governor Lowe: Rate hike still plausible before the end of the year

Lowe: Would like to see a couple more CPI readings before making decisions

ECB head Lagarde: Hiking interest rates would not solve current problems

U.K. economy grew 1.0% in Q4 2021 vs. 1.1% forecast

U.K. industrial production up 0.3% vs. 0.1% consensus

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.K. preliminary business investment data coming up
U.S. preliminary UoM consumer sentiment index at 3:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: GBP/JPY

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

Guppy is trending higher on its short-term chart, cruising above a rising trend line that’s been holding since the last week of January.

Another test of support seems to be underway, and I wouldn’t want to miss it!

Using the handy-dandy Fib tool on the latest rally shows that the 61.8% level is right smack in line with the potential support zone.

A smaller correction could already find buyers at the 50% Fib, which is near the 100 SMA dynamic inflection point and coincides with a former resistance area.

In any case, if any of these hold as a floor, we might just see GBP/JPY climb back up to the swing high at the 158.00 handle.

Technical indicators seem to be favoring a continuation of the rally, with the 100 SMA above the 200 SMA and Stochastic dipping close to the oversold region already.

I’d stay on the lookout for the U.K. GDP release, though, as a huge downside surprise might spur a reversal from the uptrend instead.