Prior to the announcement of the U.S. CPI later today, I'm avoiding dollar pair trades!
Instead, given that the U.K. published generally positive jobs data, I'm focusing on this potential triangle breakout on the GBP/JPY exchange rate.
According to the claimant count update for January, there were 12.9K less unemployed people than expected, down from 17.9K. Additionally, there was a noticeable improvement from the previous 19.7K increase in claims.
The average wages index fell from 6.4% to 5.9% to indicate lower inflationary pressures, but the unemployment rate remained at 3.7% as forecast.
Additionally, technical signs are conflicting. Guppy might move higher by the same amount as the chart pattern if the resistance breaks, as indicated by the 100 SMA crossing above the 200 SMA.
The Stochastic indicator, however, has been circling in the overbought region for some time, thus moving lower would indicate that selling pressure is increasing. In that situation, GBP/JPY may drop below the triangle support in the 158.50–159.0 range.
The yen may continue be under pressure as a result of the selection of the next BOJ president. More negative for the JPY may result from Kazuo Ueda's dovish comments, which have been interpreted as indicating that the present monetary policy stance is suitable, and that additional easing may be required.
