GBPJPY has been on a steady uptrend, moving above an ascending trend line connecting the latest lows of price action on its 1-hour chart.

Price has surged past the 145.00 mark before showing signs of a pullback and applying the Fib tool on the latest swing low and high shows that the 61.8% level lines up with an area of interest or former resistance at 141.00.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the 200 SMA coincides with the rising trend line, adding to their strength as a floor. The 100 SMA coincides with the 61.8% Fib, although a shallow correction could already see a bounce off the higher Fib levels.

Stochastic is on the move down to show that sellers are in control of price action for now. However, the oscillator is already nearing the oversold level to suggest weakening bearish pressure and a potential return for buyers.

Economic data from the UK was weaker than expected yesterday, as the manufacturing PMI fell from 54.2 to 53.4 to reflect slower industry growth instead of rising to the projected 54.4 figure. UK construction PMI is due today and a drop from 52.6 to 52.3 is eyed.

Data from Japan was mixed, as the final manufacturing PMI saw an upgrade from 51.1 to 51.3 while capital spending sank 1.3% in Q3 versus the projected 0.4% dip. Yen weakness still seems to be a prevailing theme, as it has been for the past few weeks.

There are no major reports lined up from Japan for the rest of the day, although the US NFP release could have an impact on overall market sentiment and yen demand. Significantly strong results could draw more traders to the dollar on rate hike expectations and away from the lower-yielding yen.

By Kate Curtis from Trader’s Way