The GBP/JPY drops and continues to hover above a crucial support area. However, the rate is somehow expected to increase in the upcoming period after the minor decrease. Price moves sideways now, but I really hope that we’ll have a trading opportunity very soon. The rate is more a buy then a sell right now because is located above some very important support levels.

However, we may have a significant drop if the Nikkei will drop further and will resume the current retreat. JP226 is pressuring a very important dynamic support (resistance turned into support), but is premature to say that we’ll have a valid breakdown, the current retreat could be only temporary and natural after the impressive rally.

The Yen increased a little on the mixed Japanese data, the Tertiary Industry Activity dropped by 0.2% in September, more versus the 0.1% estimate and versus the 0.1% drop in the former reading period, while the M2 Money Stock indicator increased by 4.1%, matching expectations and reaching the highest rate of the last 6-months. We’ll see what the United Kingdom will bring, the Manufacturing Production is expected to increase by 0.3% in September, less versus the 0.4% in August, while the Goods Trade Balance could increase from -14.2B to -12.9B. The Construction Output and the Industrial Production will be released as well.

The rate dropped a little, but continues to stay much above the 148.44 static support and above the first warning line (WL1) of the major descending pitchfork. I’ve said in the last article that the rate should increase again after the 148.44 retest. Price has touched the confluence area formed between the 148.44 with the WL1 and failed to close on it or to breakdown, signaling another upside movement. Price could drop only if the JP225 will make a valid breakdown below a dynamic support and will stabilize below the 22319 previous low. Price could move sideways till will reach the first warning line (wl1) of the ascending pitchfork.