GBPJPY Correction Offers Bullish Opportunities

UK Data in FocusGBPJPY is correcting sharply lower today as JPY gains on USD weakness. The latest set of UK labour market readings today have kept hawkish BOE expectations well-primed. However, with UK inflation still rampant, the unemployment rate creeping higher, and interest rates set to move higher still from already elevated levels, the growth outlook in the UK is starting to become more of an issue. Looking ahead today, the market will receive the latest NIESR GDP estimate which has the potential to drag the pair further lower if a weak reading is seen.Corrective Move – For NowWhile GBPJPY is moving lower, however, it’s worth considering the bull trend we’ve seen over recent months. Consequently, for now the current move needs to be viewed as a correction rather than the start of a proper reversal. With the BOE still widely expected to press ahead with at least two further hikes this year, and the BOJ sticking to its guns over easing, the pair is vulnerable to fresh waves of upside action. This is particularly true if we see risk appetite picking back up, leading to weaker safe-haven demand for JPY.Technical ViewsGBPJPYThe correction from the highs around 184.33 has seen the market trading back down to test support at the 180.78 level, with the bull channel lows sitting around this region also. Price is stalling here for now, suggesting room for a fresh push higher while we hold above this level. Interestingly, we also have a bullish signal in the Signal Centre today set just a bit lower at 179.80 targeting a fresh move up to 183.70.