Should We Keep an Eye on the Upside Potential for the Pound, Which Rallied Against the Yen on the Back of an Improvement in the U.K. Unemployment Rate?

Should We Keep an Eye on the Upside Potential for the Pound, Which Rallied Against the Yen on the Back of an Improvement in the U.K. Unemployment Rate?

13.08.2025

In the U.S. currency market the previous day, the Canadian dollar fell against the yen. The CAD/JPY pair fell from 107.754 to 107.196.The price fell within the range of the hourly Bollinger Bands from +2σ to -3σ. On the 4-hour chart, the pair is trading sideways while finding support at the 200 SMA, and on the daily chart, resistance is building just below the 20 MA. We will be closely monitoring the direction of the market to see if the Canadian dollar’s momentum weakens during today’s U.S. trading session.

Among European currencies, the pound rose against the yen following the release of the UK’s July employment statistics yesterday, which showed the unemployment rate improved by 0.1 percentage points from the previous month’s 4.5% to 4.4%. The GBP/JPY pair rose from 198.713 to 200.076. An uptrend was observed along the 20-period moving average (MA) on the hourly chart.On the 4-hour chart, the trend along the 10-period moving average has continued since the start of this month, and on the daily chart, the pair has risen for six consecutive days. The candlesticks have extended up to the +3σ level of the Bollinger Bands.

Today, Japan’s Domestic Corporate Price Index will be released at 8:50, Australia’s Second-Quarter Wage Cost Index at 10:30, and Germany’sWholesale Price Index, Germany’s Consumer Price Index, and Japan’s Machine Tool Orders; at 20:00, the U.S. MBA Mortgage Applications Index and South Africa’s Retail Sales; at 21:00, remarks by U.S. Federal Reserve Bank of Richmond PresidentRichmond Fed President’s remarks, at 23:30: U.S. weekly crude oil inventories, at 26:00: U.S. Goolsbee: Chicago Fed President’s remarks, and at 26:30: U.S. Bostic: Atlanta Fed President’s remarks.We want to assess the upside potential for the pound against the yen, which has risen on the back of an improvement in the UK unemployment rate.