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The U.K. is printing its labor market reports today!

Will it lead to GBP/JPY going back to its June lows? Or will it motivate bulls to break above some key resistance levels?

Before we discuss today’s setup, check out the headlines that moved the major currencies today:

Currency Snapshot

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • SECO economic forecasts at 5:45 am GMT
  • U.K.’s labor market numbers at 6:00 am GMT
  • Germany and EU’s ZEW economic sentiment 9:00 am GMT
  • U.S. retail sales at 12:30 pm GMT

What to Watch: GBP/JPY

GBP/JPY 1-hour Forex Chart
GBP/JPY 1-hour Forex Chart

GBP/JPY is consolidating just under the 200 SMA. As you can see, the level has also served as support and resistance for the pair in the past couple of weeks.

Let’s see if today’s U.K. labor market numbers can coax a direction from the currency pair. Analysts are expecting weak numbers for the month of May but, if the U.S. release was any indication, then we could see upside surprises from the reports.

If the U.K.’s employment releases come in lower than the markets’ already weak expectations, then we could see GBP/JPY revisit its June lows near 134.50.

If today’s numbers don’t show significant downside surprises, though, or if some details print better than analysts’ estimates, then Guppy could join the risk-friendly train that has passed the U.S. and Asian session markets.

In this case, we can wait for a break above the 200 SMA and maybe a move all the way to the 137.50 area of interest.

Not too sure of your entry and stop placements? You can review GBP/JPY’s average volatility for clues on how far the pair can move today.