Chart Art: GBP/JPY Tests Key Resistance Ahead of U.K. CPI

Guppy got a lift from strong U.K. jobs data this week, but it’s closing in on a stacked resistance zone on the daily time frame.

Can Sterling hold its gains at the break-and-retest area near the Fibs?

Check out these potential inflection points on the daily chart!

GBP/JPY: Daily

The pound led the G10 currencies after U.K. unemployment unexpectedly fell to 4.7% and employment jumped by 102,000, keeping a November 5 Bank of England rate hike firmly in play.

The yen, meanwhile, lagged despite elevated geopolitical risks. It’s consistently underperformed the dollar and franc during risk-off periods, and the BOJ’s decision to hold rates hasn’t done much to change that.

GBP/JPY has recovered from the 207.00 lows and is nearing a potential retest zone around the 38.2% Fibonacci retracement and the 212.00 handle.

The 100 and 200 SMAs are converging there, with the broken ascending trend line just overhead. If GBP/JPY fails to clear the resistance zone, the pair could turn lower toward the 207.00 swing lows. A sustained break below that support would put the S1 Pivot Point near 204.795 in view and strengthen the case for a longer-term bearish reversal.

But if price reclaims the Fibonacci level, moving averages, and broken trend line, pound bulls could regain control. That would put the R1 Pivot Point (214.748) back in play, with 217.20 and 218.00 as potential targets if momentum holds. Wednesday’s U.K. CPI report could help tip the balance.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!