The bottom of GBP/JPY’s 4-hour range held as support yesterday as the pair bounced off the 149.00 area and rallied to 152.00. Right now, GBP/JPY is stalling around the middle of the range, still undecided whether to go up or down.
The UK will release its claimant count change report in today’s London session and this could determine where the pair will trade today. Expectations are of a 14.3K drop in joblessness and a larger than expected decline could push GBP/JPY to the top of the range. On the other hand, an increase in unemployment or a lower than expected decline could trigger another test of the range support.
Stochastic is already in the overbought region, which suggests that a selloff could be in the cards. However, the oscillator hasn’t crossed down yet so there might still be room for some rally.
By Kate Curtis from Trader’s Way.