GBPJPY Testing Critical Support Area

Key Highlights

• British pound surged higher against the Japanese yen, but stalled around 178.00 area.

• GBPJPY is correcting lower, and approaching a monster support area where buyers might appear.

• Japanese Consumer Confidence released by the Cabinet Office posted a minor increase from the last reading of 40.9 to 41.7 in March 2015.

Technical Analysis

As mentioned the GBPJPY pair was seen gaining bids, as it traded higher to test an important swing area of 178.00. The pair is correcting lower, and heading towards a bullish trend line formed on the hourly chart. The highlighted trend line might act as a barrier for sellers, as it is also coinciding with the 23.6% fib retracement level of the last leg from the 175.68 low to 178.00 high. A break below the same could take GBPJPY towards the 200 hourly simple moving average which is sitting above the 38.2% fib level.

Alternatively, if it moves higher, then initial hurdle would be around the recent pivot of 178.00. Only an hourly close above the mentioned level could ignite more gains in the near term.

UK Employment Report

Today, there are several important risk events lined up in the UK, including the employment report. The Claimant Change showing the number of unemployment people in the UK will be released by the National Statistics.

The forecast is lined up for a change of -28K in March 2015, compared to the last change of -31K. Moreover, the UK unemployment rate is expected to decrease from 5.7% to 5.6%.