- The GBP/JPY is trading into the high side near the 187.00 handle.
- The Pound Sterling saw light gains on Wednesday, setting a new weekly high.
- Japanese markets to be dark on Thursday in observation of Labor Thanksgiving Day.
The GBP/JPY is trading into the high side near 187.00 heading into Thursday's market session, bolstered by a Japanese Yen (JPY) that is seeing some paring back after several days of gains.
The Pound Sterling (GBP) has recovered some ground against the Yen for this week, setting a new peak just beyond 187.00, but the pair is now cycling just below 187.00.
Thursday markets are set to see unsteady volatility and an overall decline in directional momentum with Japanese markets shuttered for the Labor Thanksgiving holiday, but Yen traders will be returning to the fold on Friday.
The UK sees S&P Global/CIPS Purchasing Manager's Index (PMI) figures for November on Thursday, and investors are hoping for the Composite figure to hold steady at 48.7.
The UK Manufacturing PMI Component is expected to tick upwards slightly from 44.8 to a flat 45.0, while the Services Component is seen holding at October's reading of 49.5.
Japanese National Inflation figures will be landing early Friday, but the release is unlikely to move markets in a meaningful way unless the numbers deviate wildly. Japan's National Consumer Price Index (CPI) inflation reading is usually front-run by the Tokyo CPI release a couple of weeks earlier.
Friday also sees the UK GfK Consumer Confidence survey for November, which is expected to improve, albeit slightly, from -30 to -28 as consumers remain negative about the UK's domestic economy.
GBP/JPY Technical Outlook
The GBP/JPY is trading closely with the 187.00 handle, looking for a topside break after early Wednesday's bull run failed to hold chart territory north of the major figure.
The pair is finding intraday support from the 200-hour Simple Moving Average (SMA), and the key for bidders will be to stop the Guppy from reversing course back into the near-term median prices near the 50-hour SMA at 185.80.
Daily candlesticks have the pair trading on the high side of the 50-day SMA, but it's getting difficult to ignore the Guppy's overbought stance, and the Moving Average Convergence-Divergence (MACD) has been printing a bearish divergence.
GBP/JPY Hourly Chart
GBP/JPY Daily Chart
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