During the early European trading on Tuesday, the GBP/JPY pair was in the red, hovering around 213.15. A stronger-than-expected gross domestic product (GDP) report from Japan for the first quarter lent some strength to the Japanese yen (JPY), posing a challenge for the cross.
Attention is now shifting towards the UK jobs report, set to be released later today. The unemployment rate in March is predicted to remain steady at 4.9%, while claims for April are forecasted to rise by 27.3 individuals. Should the UK labor market show any signs of improvement, there’s a chance the pound sterling (GBP) could gain against the yen in the near term.
Technical analysis:
Looking at the daily chart, GBP/JPY stands above the 100-day exponential moving average (EMA) and the lower Bollinger Band, which supports the overall uptrend, despite a recent downward shift. Currently, prices are below the midline of the Bollinger Bands, with the Relative Strength Index (RSI) sitting around 48, indicating neutral momentum after previous highs.
On the upside, the first resistance is at the middle band of the Bollinger Bands, around 213.85, and if buying interest picks up, the next bullish target could be the upper band at 216.45. On the downside, immediate support is near 211.55 at the 100-day EMA, followed by further support at the lower Bollinger Bands near 211.22. A significant drop below this zone could diminish the bullish outlook and lead to a deeper correction.
