GBPJPY is trending higher on its hourly time frame, with the latest lows connected by a rising trend line that’s been holding since the start of February. Price might be due to test this support area soon.

The Fibonacci retracement tool shows that the rising trend line coincides with the 61.8% level and the 157.00 major psychological mark. This also lines up with a former short-term resistance zone that might hold as a floor.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. Price already seems to be finding some buyers at the 50% Fib and could be due to resume the rally to the swing high near 158.00 soon.

Stochastic is dipping into the oversold region to signal exhaustion among sellers, so turning back up would indicate that buyers are taking over. RSI has more room to move south, though, so price could follow suit until oversold conditions are met.

The UK is due to release its preliminary GDP for Q4 2021 today and might print another 1.1% expansion. A weaker than expected growth reading, however, could keep stagflation fears in play and spur more losses for the pound.

Underlying data, such as the manufacturing and industrial production figures would likely spur additional volatility. Analysts are expecting to see a meager 0.1% uptick in industrial production after the earlier 1.0% gain, though. A strong read could mean upside for the UK currency while a surprise decline could trigger a reversal from the short-term climb.

Still, it’s worth noting that the BOE is under pressure to tighten monetary policy in order to keep price pressures in check, so the pound might be able to stay afloat regardless.

Risk-on flows could also favor the pound over the safe-haven yen, especially as global geopolitical tensions fade.