This week's economic calendar is packed with key data releases that could drive volatility across major markets. On Thursday, attention will focus on Australia's employment figures, UK GDP, and a trio of critical U.S. indicators—PPI, retail sales, and jobless claims. Friday rounds out the week with U.S. consumer sentiment and inflation expectations.
Amid these macro drivers, GBPJPY continues its bullish momentum, underpinned by strong technical signals and diverging fundamentals: the UK labor market shows early signs of softening, while the Bank of Japan maintains a cautious but hawkish stance in response to persistent inflationary pressures. Traders will be watching upcoming data closely to assess whether the current trend can extend—or if a shift in sentiment is on the horizon.
Overview
This week's economic calendar is packed with key data releases that could drive volatility across major markets. On Thursday, attention will focus on Australia's employment figures, UK GDP, and a trio of critical U.S. indicators—PPI, retail sales, and jobless claims. Friday rounds out the week with U.S. consumer sentiment and inflation expectations.
Amid these macro drivers, GBPJPY continues its bullish momentum, underpinned by strong technical signals and diverging fundamentals: the UK labor market shows early signs of softening, while the Bank of Japan maintains a cautious but hawkish stance in response to persistent inflationary pressures. Traders will be watching upcoming data closely to assess whether the current trend can extend—or if a shift in sentiment is on the horizon.
Key Economic Events
Thursday 04:30 am (GMT+3) – Australia: Employment Change (AUD)
Thursday 09:00 am (GMT+3) – UK: GDP m/m (GBP)
Thursday 15:30 (GMT+3) – USA: PPI m/m (USD)
Thursday 15:30 (GMT+3) – USA: Retail Sales m/m (USD)
Thursday 15:30 (GMT+3) – USA: Unemployment Claims (USD)
Friday 17:00 (GMT+3) – USA: Prelim UoM Consumer Sentiment (USD)
Friday 17:00 (GMT+3) – USA: Prelim UoM Inflation Expectations (USD)
Technical Analysis
Since establishing a low at 184.359 on April 9, GBPJPY has transitioned into a clear upward trend, signaling the exhaustion of prior bearish momentum and the onset of a bullish reversal. The decisive break above the previous swing high at 189.610 confirms the shift in market structure and underscores growing upward pressure.
Technically, the pair remains well-supported above both the 20- and 50-period Exponential Moving Averages (EMAs), reflecting sustained buying interest. Notably, the formation of a "Golden Cross"—where the 20-period EMA crossed above the 50-period EMA—provides additional confirmation of the bullish trend.
Momentum indicators align with this outlook. The Momentum Oscillator remains elevated above the 100 level, indicating strong directional strength, while the Relative Strength Index (RSI) continues to trade above the 50 mark, reinforcing the positive bias in the current price action.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
196.372: The first price target is observed at 196.372, representing the daily high marked on May 13.
197.595: The next price objective is seen at 197.595, as determined by the weekly resistance, R3, estimated using the standard Pivot Points methodology.
199.290: Similarly, the third target is projected at 199.290, which corresponds to the 261.8% Fibonacci Extension drawn from 193.737 to 190.305.
204.843: An additional price target is estimated at 204.843, representing the 423.6% Fibonacci Extension drawn from 193.737 to 190.305.
Potential Downside Targets
If the sellers manage to take control of the market, then traders may consider the following targets:
193.737: The first price target is observed at 193.737, representing a peak from May 2.
192.360: The next price objective is seen at 192.360, corresponding to the weekly Pivot Point, PP, calculated using the standard methodology.
189.610: The third target is 189.610, reflecting the daily high marked on April 16.
187.452: An additional downward target is observed at 187.452, corresponding to the trough from April 22.
Fundamentals
The UK labour market showed signs of cooling in early 2025. Payrolled employees fell by 33,000 in April and by 106,000 year-on-year, while the employment rate held steady at 75.0% in Q1. The unemployment rate rose to 4.5%, and economic inactivity declined slightly to 21.4%.
The Claimant Count—reflecting the number of people claiming unemployment-related benefits—increased to 1.726 million in April, up both on the month and the year, indicating rising pressure in the jobs market.
Vacancies continued to decline, falling by 42,000 to 761,000—marking the 34th consecutive quarterly drop. Meanwhile, average earnings grew 5.6% annually (excluding bonuses), with real pay growth ranging from 1.7% to 2.6% depending on the inflation measure used. Labour disputes led to 55,000 working days lost in March..
On the other hand, the Bank of Japan remains committed to its gradual rate-hike path, even as U.S. tariff uncertainty clouds the economic outlook, Deputy Governor Shinichi Uchida said on Tuesday. While acknowledging that tariffs may weigh on growth, Uchida pointed to continued wage growth and rising prices as reasons to stay the course, citing Japan's tight labor market and firms' ongoing ability to pass on costs.
At its recent policy meeting, the BOJ held rates steady at 0.5% and sharply downgraded growth forecasts. However, several board members saw potential to resume hikes if U.S. trade risks ease. The BOJ is expected to reassess its bond tapering plan at its June meeting as it navigates external headwinds and persistent domestic inflation pressures.
Conclusion
With a busy economic calendar and diverging macro fundamentals between the UK and Japan, GBPJPY remains in focus for traders. The pair's strong technical structure—reinforced by bullish momentum and clear upside targets—suggests the path of least resistance remains higher for now. However, upcoming data from the UK, U.S., and Australia could introduce volatility and test the strength of the current trend. As central bank policy paths continue to diverge, market participants should stay nimble and closely monitor both price action and economic signals in the days ahead.