GBPJPY is still consolidating inside its ascending triangle on the 4-hour time frame, but this time the pair is testing the resistance. A break higher could set off a rally that’s the same height as the formation, which spans around 500 pips.

The 100 SMA just crossed above the 200 SMA to suggest that the path of least resistance is to the upside or that resistance is more likely to break than to hold. Price is also trading above both moving averages, so these could hold as dynamic support on dips.

However, stochastic is indicating overbought conditions or exhaustion among buyers, so turning lower would mean that sellers are returning. RSI is also turning south from the overbought area, so GBPJPY could follow suit as bears take over.

In that case, GBPJPY could dip back to the triangle bottom around 158.00-158.50.

Earlier today, the UK reported stronger than expected jobs data, as the claimant count showed a reduction in joblessness versus the projected increase. However, the unemployment rate was unchanged while the average earnings index reflected slower wage growth.

Tomorrow, the UK will print its CPI figures, and a pickup in price pressures might be enough to keep BOE tightening hopes in play. Downbeat data, on the other hand, could reinforce the view that the UK central bank is bound to pause tightening soon.

Analysts are projecting a dip from 10.5% to 10.3% for the headline CPI while the core version of the report might drop from 6.3% to 6.2% in January. Underlying inflationary pressures as reflected by producer price indices might see a rebound, though.

Meanwhile, the yen remains under downside pressure as the next BOJ Governor was quoted saying that the current monetary policy stance is appropriate. This could mean a continuation of their easing efforts, which would mean more losses for the Japanese currency.