The GBP/JPY moves higher as the Yen is punished by the Nikkei’s further increase. A further drop was invalidated as the rate has made a false breakdown below a very strong dynamic support. We’ll see what will really happen in the upcoming period because is hard to believe that the Cable will increase sharply.

The rate is somehow expected to increase after several false breakdowns below an important dynamic support. The Cable has increased significantly also versus the Euro and not only versus the Yen.

The Yen dropped further as the Japanese Core Machinery Orders have disappointed after a 3.9% drop in March, more versus the 2.9% estimate.

The JP225 has managed to breakout above the upper median line (UML) of the major descending pitchfork and now could try to approach the median line (ml) of the minor ascending pitchfork again. You can see that the median line (ml) represents a very strong dynamic resistance, so a false breakout or a failure to reach it will send the rate down again.

The GBP/JPY should be driven by the technical factors tomorrow as the only report that could influence the price will be the Japanese National Core CPI, which is expected to increase by 0.8%.

Price increased after the failure to stabilize below the lower median line (LML) of the minor ascending pitchfork. It could be attracted by the second warning line (wl2) of the former ascending pitchfork. Technically, it was somehow expected to drop further after the failure to stay above the wl2. The rebound could be temporary and the rate could still drop towards the third warning line (wl3) of the former ascending pitchfork.

If you want to sell it, you should wait for a valid breakdown below the lower median line (LML). We’ll have a great selling opportunity if we’ll have a bearish signal from the JP225.