The GDP in the UK grew by 0.7% in the second quarter of the year. At the same time, the Bank of Japan is going to pursue extra soft monetary policy amid weak consumer spending and falling exports to China.
Thus, in the medium-term the pair GBP/JPY is going to grow.
Tomorrow, markets are waiting for the decision on the interest rate by the Bank of England and its head Mark Carney speech, and NIESR GDP Estimate.
On Friday, pay attention to the Bank of Japan Monetary Policy Statement, UK Trade Balance data and the key event of the week, NFPR release in the US.
Support and resistance
From the middle of July, the pair GBP/JPY has been trading within the range between 194.50 and 191.00, but continues growing towards 197.80 (61.8% Fibonacci).
At present, the pair remains flat. OsMA and Stochastic on the 4-hour and daily charts remain near the zero line.
Support levels: 193.20, 192.20, 191.00, 189.25, 186.90, 184.85.
Resistance levels: 194.50, 195.50, 197.80.
Open long positions from the current levels and from 193.00, 192.20, 191.50, 191.00 with targets at 194.50, 195.00, 195.50, 197.80 and stop-loss at 190.50.
Short positions can be opened after the breakdown of the level of 189.25 with targets at 186.90, 184.85, 182.70.