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GBP/JPY downside exposed on UK risk

FXStreet (Guatemala) - GBP/JPY is trading at 181.93, down -0.04% on the day, having posted a daily high at 182.04 and low at 181.79.

GBP/JPY is taking back some ground that was lost when the pair slid at the end of last week's business having been punished mid week when beyond the 184 handle to the lows. 182.20 was the bulls target overnight when sailing up from below the 181.20. The Yen had likely taken advantage of the greenback giving out some profits but that may have just given traders a cheap entry again which the cross took relief from.

This week will be a key week for Sterling with both the unemployment rate and the quarterly inflation report from the Old Lady. It is unlikely that they will be any surprises in the inflation report and forecasts from RBS are for CPI inflation to remain below target through 2015 and 2016 (grinding up to 1.8% at our December 2016 horizon). The unemployment rate could be a catalyst for a further surge in cable to the downside should a poor number be confirmed and the cross would be dragged along for the ride at the same time and that could bring the 181 key support and psychological level into play and open u[p the downside in a big way.

GBP/JPY noteworthy levels

With spot trading at 181.95, we can see next resistance ahead at 181.98 (Weekly Classic PP), 182.03 (Daily Classic PP) and 182.27. Support below can be found at 181.85 (Hourly 20 EMA), 181.79, 181.14 (Daily Classic S1), 181.08 and 180.00.

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