The U.K. is printing its labor market reports today!
Before we discuss today’s setup, check out the headlines that moved the major currencies today:
Fresh Market Headlines & Economic Data:
- New Zealand consumer confidence down 7 points to 97.2 in Q2 2020
- Sydney, Melbourne house prices up more than 10pc in year before shutdowns
- RBA: Slump may be “shallower than expected”
- RBA: fiscal and monetary support will be “required for some time”
- Bank of Japan holds fire, pledges $1 trillion to struggling firms
- Trump team weighs $1 trillion for infrastructure to spur economy
- Virus-hit Beijing tightens outbound travel; Shanghai demands quarantine
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 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.