GBP/JPY increased today and maintains a bullish perspective on the short term. Price hovers above a very strong support area and could still increase if the Yen will ignore the Nikkei’s further drop. The Japanese stock index dropped in the last days and now is located below a very important dynamic support. I’ve said in the previous week that a valid breakdown somewhere below the 22300 will signal a further drop and a Yen’s dominance.

We’ll see what will happen in the upcoming days because the rate narrows, so the direction is still uncertain because this could be a distribution movement and not an accumulation. The Cable increased even if the UK’s inflation data have come in mixed today. The CPI rose by 0.3%, less versus the 3.1% estimate, it has remained steady at 3.0% for the second month in October, while the Core CPI increased only by 2.7%, less versus the 2.8% estimate. The PPI Output increased by 0.2%, less versus the 0.3% estimate, the RPI by 4.0%, less compared to the 4.1% estimate.

The Cable received support, only from the PPI Input, which has increased by 1.0%, more than the 0.8% estimate, while the HPI surged by 5.4%, beating the 5.2% estimate.

The rate increased after the yesterday’s false breakdown below the 148.44 static support and below the first warning line (WL1) of the major descending pitchfork. Price also failed to close on the mentioned levels, signaling that we may have a  bullish momentum in the upcoming period. However, it could move in range on the short term before will accumulate enough energy to really start an important movement.We may have a buying opportunity if the 148.44 support will hold and if will retest the first warning line (wl1) of the ascending pitchfork. A broader drop will be confirmed only by a valid breakdown below the first warning line (WL1) of the ascending pitchfork. Price action could develop a symmetrical triangle on the short term, so a breakout from a potential pattern will bring us a great trading opportunity.