Global macro overview for 13/02/2017:
The Japanese Gross Domestic Product data for the fourth quarter had missed the expectations. The Cabinet Office said in a preliminary report published on Monday that Gross Domestic Product (GDP) expanded 0.2% in the October-December period and 1% annually that follows a 0.3% expansion in the third quarter (and 1.17 annually). Nevertheless, the Japanese economy has expanded for four consecutive quarters now, but the pace of growth has declined slightly. The recent manufacturing and employment data confirmed that the economy is gradually improving, but the main headwinds for Japan might come from deflation risk and weak domestic demand. The Bank of Japan still remains on the sideline and it is very unlikely for BoJ to terminate the stimulus any time soon.
Let's not take a look at the GBP/JPY technical picture at 4H time frame. The bulls are trying to break out above the golden trendline resistance, but the current market conditions look overbought for now. Nevertheless, the bias is to the upside and any eventual break out above the level of 142.61 will open the road towards the next resistance at the level of 144.10 and 144.76. Invalidation of this scenario comes with a clear violation of the level of 140.98.
