The GBP/JPY pair rebounded in the last hours and now is trading at 160.38 far above 159.75 today's low. Technically, the price action signaled a potential larger corrective phase, but it's premature to talk about this scenario.
Today, the British Pound took a hit from the UK data, the figures came in worse than expected. On the other hand, the JPY received a helping hand from Japanese Consumer Confidence, Retail Sales, and Prelim Industrial Production indicators.
Tomorrow, the Japanese Final Manufacturing PMI and UK Final Manufacturing PMI could have an impact. Also, don't forget that the BOE is expected to increase the Official Bank Rate to 4.00% from 3.50%. This represents a major event and could change the sentiment.
GBP/JPY Flag Pattern!
Technically, the rate slipped lower after taking out the uptrend line. Now, it has found demand right below the channel's downside line. The weekly pivot point of 160.73 represents a static resistance.
The downtrend line is seen as a dynamic resistance. The critical support is represented by 159.75 today's low.
GBP/JPY Forecast!
Coming back to test and retest the channel's downside line and the 159.75, registering only fasle breakdowns may announce a new leg higher. This could bring a new buying opportunity.
A larger drop and a new selling opportunity could be activated by a new lower low, after making a bearish closure below 159.75 and under the S1 (159.64).
