GBP/JPY grapples with 188.60 ahead of densely-packed week

The GBP/JPY saw an early dip below the 188.00 handle before markets recovered back into familiar levels on Monday, and the Guppy pair continues to trade into familiar consolidation levels heading into a heavy week full of UK and Japanese figures on the economic calendar’s data docket.

This week brings UK labor figures on Tuesday, followed by Wednesday’s UK Consumer Price Index (CPI) inflation. Thursday follows up with Japanese Gross Domestic Product (GDP) figures early in the day, after which the UK brings its own GDP growth print. Friday will round out the week with UK Retail Sales.

UK labor figures, Japan GDP data in the pipe

Tuesday’s UK ILO Unemployment Rate for the quarter ended in December is expected to tick down to 4.0% from the previous quarter’s 4.2%, while Average Earnings Including Bonuses for the annualized quarter through December is expected to soften further, to 5.6% from the previous period’s 6.5%.

The UK’s YoY Core CPI inflation is expected to tick higher on Wednesday, forecast to increase to 5.2% from 5.1%, while headline CPI inflation for January is forecast to recede, expected to print at -0.3% versus the previous month’s 0.4%.

Japanese GDP growth is expected to rebound early Thursday, with fourth quarter GDP forecast to print at 0.3% after the third quarter’s -0.7%.

GBP/JPY technical outlook

GBP/JPY remains well-supported with the pair continuing to trade on the high side of the 200-hour Simple Moving Average (SMA) near 187.20. The pair broke through the near-term median technical barrier last week and has climbed nearly 2% from February’s early lows near 185.25.

The volatile Guppy pair remains bid into multi-year highs, testing the waters just below the 190.00 major price handle, with near-term technical support from the 200-day SMA at 182.20.

GBP/JPY hourly chart

GBP/JPY daily chart