GBP/JPY forecast this week: In my previous GBP/JPY update, I pointed out three bearish signals looming the pair. Now that those observations are confirmed, we are facing yet another jam-packed week of economic data coming up which could especially have an impact on the British Pound. 

1- Technical Points: GBP/JPY Forecast This Week

Daily Time Frame:  We have all three of the Ichimoku Kinko Hyo confirmations on this time frame, as the Chiko span just broke below the delayed cloud, GBP/JPY confirmed below the prevailing cloud, and the Kijun line crossed below the Tenkan line. The immediate Fibonacci support levels to watch out for are 136.85 and 133.76. The pair started Tuesday's Asian session testing the pivot level of 139.20.

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 GBP JPY Forecast This Week - Daily Chart

Monthly Time Frame: The pair remains below the monthly Ichimoku cloud, and appears to be in the process of forming a double top chart pattern, with the tops laying on 144.33.

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 GBP/JPY Forecast This Week - Monthly Chart Technical Analysis

 2- Fundamental Points/

UK Side: While market participants are just getting over last week's UK elections, we have more market moving events coming up this week.

First up, we’ve got UK’s Consumer Price Index, which is the key measure of inflation, due on Tuesday’s London trading session. Analysts are expecting to see a meager 0.2% uptick in the May CPI reading, which should be enough to keep the annual figure unchanged at 2.7%.

Next is UK's jobs data, scheduled for Wednesday June 14, 9:30 am GMT.In April, the U.K. economy shed 19.4K jobs and is expected to have lost 20.3K positions in May, but the unemployment rate is still projected to stay unchanged at 4.6%.

Thursday could turn out to be yet another Super Thursday, as UK's retail sales, BOE rate decision and MPC minutes are all gonna shake-it, shake-it. The retail sales report should provide a clearer picture on consumer behavior, although this one might have a subdued impact on pound price action since it comes a few hours before the highly-anticipated BOE decision.

By the looks of it, policymakers had been expecting the U.K. government to have a united front in Brexit negotiations, which might not be the case now that a Theresa May is  battling to hold on as UK Prime Minister. At that time, Carney admitted that they haven’t come up with Plan B in case things get ugly, so market watchers are all ears to find out what the BOE is planning to do.

Last but not least, the Brexit negotiations with the EU were due to start on 19 June but Moody's said the fact that the Conservatives had lost their majority would delay the start of the talks.

Japan's Side: The Japanese Yen has been acting as a safe haven amid international political and economic developments that has been putting pressure on other major currencies including the British Pound, Euro and the US dollar. On the economic calendar, Japan’s Industrial Production is scheduled for Wednesday at 4:30 AM GMT. However comparing to the UK economic data, this could have much lower impact on the pair. 

3- Market Sentiment

Retail trader data earlier on Monday showed that 53.6% of traders are net-long the GBP/JPY pair. This may change on Tuesday as we are seeing early signs of a temporary correction.

In general, traders are further net-long than  last week, and the combination of current sentiment and recent changes gives us a stronger bearish contrarian trading bias for GBP/JPY forecast this week.

GBP/JPY Forecast This Week - Strategy Development