#GBPJPY @ 160.717 has shifted its auction profile above 160.00 amid rising hawkish BoE bets. (Pivot Orderbook analysis)

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• GBP/JPY has shifted its auction profile above 160.00 amid rising hawkish BoE bets.
• According to a Reuters poll, the BoE might hike its interest rates by 50 bps to 4% in February.
• Higher-than-expected UK PPI data could accelerate inflation projections further.

The pair currently trades last at 160.717.

The previous day high was 161.85 while the previous day low was 159.99. The daily 38.2% Fib levels comes at 160.7, expected to provide support. Similarly, the daily 61.8% fib level is at 161.14, expected to provide resistance.

The GBP/JPY pair sensed a decent buying interest after dropping to near the round-level resistance of 160.00. The cross is attempting to extend its recovery meaningfully above 160.50 amid rising expectations for the continuation of bulky interest rate hikes by the Bank of England (BoE) ahead.

Following the footprints of sideways GBP/USD, the GBP/JPY pair is also demonstrating rangebound oscillation. The Pound Sterling is likely to remain in the bullish territory as the BoE seems bound to tighten interest rate policy further to contain stubborn inflation.

The latest poll conducted by Reuters for BoE interest rate projections claims that 29 of 42 economists are favoring a 50 basis point (bps) interest rate hike to 4.00 on February 02 by BoE Governor Andrew Bailey. However, residual economists have favored a 25 bps interest rate hike. In the agenda of restricting inflation to 2%, the BoE has to continue hiking interest rates further as an increment in food prices has offset the impact of softening energy prices. Also, the shortage of labor has been a major concern for the United Kingdom’s economy.

For further guidance, the release of the UK Producer Price Index (PPI) will remain in the spotlight. The core PPI output is seen higher at 13.9% vs. the former release of 13.3%. An occurrence of the same might trigger inflation projections further and could create more troubles for the BoE policymakers. Also, it might strengthen the odds of a bumper interest rate hike by the BoE.

Meanwhile, economists at CIBC Capital Markets are favoring strength in Japanese Yen in the second half of CY2023 considering the fact that the Bank of Japan (BoJ) might exit from negative rates and the largest foreign holding of US Treasuries by Japan would compress the interest rate spread.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 160.57 at the time of writing. Pair opened at 160.55 and is trading with a change of 0.01 % .

The pair is trading above its 20 Daily moving average @ 159.27, below its 50 Daily moving average @ 163.07 , below its 100 Daily moving average @ 163.98 and below its 200 Daily moving average @ 163.46

The previous day high was 161.85 while the previous day low was 159.99. The daily 38.2% Fib levels comes at 160.7, expected to provide support. Similarly, the daily 61.8% fib level is at 161.14, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 159.75, 158.94, 157.89
• Pivot resistance is noted at 161.6, 162.65, 163.46

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