#GBPJPY @ 158.462 is oscillating around 159.00 as investors await Japan’s inflation release for fresh cues. (Pivot Orderbook analysis)

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• GBP/JPY is oscillating around 159.00 as investors await Japan’s inflation release for fresh cues.
• The cross surrendered BoJ’s unchanged policy-inspired gains after Kuroda’s commentary.
• Lower-than-projected UK inflation might not delight the BoE as the median rate is excessively skewed.

The pair currently trades last at 158.462.

The previous day high was 161.54 while the previous day low was 157.35. The daily 38.2% Fib levels comes at 159.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 158.95, expected to provide resistance.

The GBP/JPY pair is displaying topsy-turvy moves around the critical hurdle of 159.00 in early Asia. The cross has shifted into a rangebound territory after a downside move from Wednesday’s high above 161.50. The asset witnessed a steep fall as GBP/JPY surrendered Bank of Japan’s (BoJ) unchanged policy-inspired gains despite dovish commentary from BoJ Governor Haruhiko Kuroda.

GBP/JPY surrendered gains at a decent pace when BoJ Kuroda, after keeping the interest rate at -0.10% and the 10-year Japanese Government Bonds (JGBs) around 0% steady, commented that there is “no need to further expand bond target band.” He further added that Japan’s economy is still on the path towards recovery from the pandemic and the BoJ is aiming to achieve a 2% inflation target sustainably, stably in tandem with wage growth.

Meanwhile, analysts at MUFG claim that the Yen sell-off should prove temporary and reiterates a bullish outlook for the JPY in the year ahead on the grounds that the upcoming end to Governor Kuroda’s term at the end of April will continue to encourage speculation over a shift in policy under new leadership. They further added that “We expect market participants to remain skeptical over the sustainability of YCC policy settings.

Further guidance on the Japanese Yen will arise from the National Consumer Price Index (CPI) data, which will release on Friday. As per the consensus, the annual headline CPI (Dec) is expected to accelerate to 4.4% vs. the former release of 3.8%. The core inflation that excludes oil and food prices is seen higher at 2.9% against 2.8% released earlier.

On the United Kingdom front, headline inflation softening to 10.5% from the expectations of 10.6% is not going to delight the Bank of England (BoE) as the current CPI is extremely far from the median rate. The street believes that BoE Governor Andrew Bailey might hike rates somewhat more than earlier expectations.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 158.73 at the time of writing. Pair opened at 159.0 and is trading with a change of -0.17 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 159.18, 50 SMA 163.42, 100 SMA @ 164.06 and 200 SMA @ 163.56.

The previous day high was 161.54 while the previous day low was 157.35. The daily 38.2% Fib levels comes at 159.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 158.95, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 157.06, 155.12, 152.88
• Pivot resistance is noted at 161.24, 163.48, 165.42

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