Hovers around the 184.50 area ahead of UK employment data

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• GBP/JPY trades within an ascending trend-channel since August 4, holds above the 154.50 region on Tuesday.
• The immediate resistance level is seen at 184.78; the initial contention level to watch is at 184.35.
• The Relative Strength Index (RSI) is located in bullish territory above 50.

The GBP/JPY pair hovers around 184.50 after retreating from a YTD high of 184.78 heading into the early European session on Tuesday. Market participants await the UK employment data due later in the day. This event could trigger the volitility in the cross.

According to the one-hour chart, the GBP/JPY trades within an ascending trend-channel since August 4. The cross stands above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward slope, which means the further upside looks favourable for the cross.

GBP/JPY’s immediate resistance level is seen at 184.78 (YTD high). The key barrier emerges at a psychological round mark near 185.00. A decisive break above the latter could pave the way to 185.60 (the upper boundary of an ascending trend-channe). Any meaningful follow-through buying will see the next stop at 186.35 (weekly high of December 4, 2015) en route to 187.00 (a round figure and a weekly high of November 27, 2015).

Looking at the downside, the initial contention level to watch is at 184.35 (high of August 14). The key support zone is located at 184.00–184.10, representing a psuchological round figure, the 50-hour EMA, and the lower limit of the ascending trend-channel. Further south, the cross will see a drop to 183.65 (the 100-hour EMA) and finally 183.00 (high of August 8 and the round mark).

It’s worth noting that the Relative Strength Index (RSI) is located in bullish territory above 50, highlighting that further upside cannot be ruled out. 

GBP/JPY one-hour chart