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

Can the numbers push Guppy’s uptrend above a key resistance level?

Before we check out the setup, take a look at the top headlines that moved the major currencies during the Asian session:

Major FX Pairs Price Performance from MarketMilk

Major FX Pairs Price Performance from MarketMilk

  • U.K. retail sales rise despite fewer High Street visits
  • Japan banks keep lending at record pace in July as pandemic pain persists
  • Japan’s 2020 1st half current account surplus lowest in over 5 yrs
  • NAB: AU economic conditions continue to recover, but confidence remains fragile
  • Japan’s service sector sentiment improves in July
  • Borders of Australia’s Northern Territory to remain closed for 18 months
  • China auto sales surge in July, log fourth straight month of gains
  • U.S. governors question cost of Trump COVID-19 aid plans, urge talks to continue
  • Asian stocks make gains despite Sino-U.S. tensions

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K.’s labor market numbers at 6:00 am GMT
  • Eurozone ZEW economic sentiment at 9:00 am GMT
  • Canada’s housing starts at 12:15 pm GMT
  • U.S. PPI numbers at 12:30 pm GMT

What to Watch: GBP/JPY

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

After rising by a whopping 700 pips since late June, GBP/JPY has taken a breather from its uptrend and is now trading within a 140-pip range.

Are we looking at a bullish flag pattern here?

The U.K. is printing its labor market numbers today and traders expect to see more unemployment claimants, lower wage growth, and a higher unemployment rate.

If today’s numbers come in weaker than markets’ already weak expectations, or if concerns over the U.S.-China geopolitical tensions and the (unproductive) U.S. stimulus talks weigh on risk sentiment, then we could see GBP/JPY revisit its 137.80 range support.

If the U.K.’s jobs data comes in better-than-expected, however, or if markets continue to shrug off U.S.-China tensions in favor of optimism over a new stimulus deal in the U.S., then we could see GBP/JPY break above the range’s resistance and test the 139.50 resistance level from late May.