GBPJPY has been moving on an uptrend on its 4-hour time frame, with an ascending channel connecting the latest highs and lows of price action.

Price is currently testing the channel support at the 186.50 minor psychological level and might be due for a bounce back to the resistance at 189.00.

The pair also seems to be drawing support from the 100 SMA, which has held as a dynamic inflection point. This short-term moving average is above the longer-term 200 SMA, indicating that the uptrend is likely to carry on.

Meanwhile, stochastic has already reached to oversold area so the recent rally might soon turn. RSI is also indicating oversold conditions and might be ready to climb, with price likely to follow suit.

There were no reports released out of the UK and Japan on Friday, and Japanese banks are on holiday today so there are no reports lined up as well. Later on in the week, the BOJ monetary policy meeting minutes are up for release and might spur volatility among yen pairs.

There are no major reports out of the UK, with most of the focus on Japan. The Tokyo and national core CPI readings are lined up on Friday, along with the unemployment rate and household spending data. Strong figures could support the idea that the BOJ isn’t likely to increase its easing efforts anytime soon while weak data could keep the likelihood of more easing in play.

As for the UK, recent reports have been mixed, suggesting that the economy is no longer as strong as it used to be. The BOE has shifted to a less hawkish stance, hinting that they might hike rates much later than initially anticipated.

By Kate Curtis from Trader’s Way