#GBPJPY @ 164.279 holds lower ground near the intraday bottom, snaps two-day uptrend. (Pivot Orderbook analysis)

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• GBP/JPY holds lower ground near the intraday bottom, snaps two-day uptrend.
• Doubts over Brexit deal’s capacity to gain British Parliamentary approval probe the earlier hopes of overcoming month-long political deadlock.
• Yields grind higher amid month-end positioning mixed sentiment.
• Unimpressive Japan data, incoming BoJ policymakers’ defense of easy money policy keep buyers hopeful.

The pair currently trades last at 164.279.

The previous day high was 164.31 while the previous day low was 162.61. The daily 38.2% Fib levels comes at 163.66, expected to provide support. Similarly, the daily 61.8% fib level is at 163.26, expected to provide support.

GBP/JPY pares the monthly gain as it retreats from the seven-week high to 164.15 during early Tuesday. In addition to the month-end consolidation, receding optimism over the recently agreed EU-UK Brexit deal also seems to tease the sellers of the cross-currency pair.

The initial agreement between UK Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen over Northern Ireland Protocol (NIP) is yet to gain parliamentary approval and hence doubts about the same probe GBP/JPY buyers.

On the same line is the news shared by BBC News saying, the leader of the Democratic Unionist Party (DUP) has said he and his colleagues will take their time to examine the new Brexit deal for Northern Ireland. Daily Express news also challenges the Brexit optimism by saying, “Boris Johnson has privately urged the DUP to be cautious about backing Rishi Sunak’s Brexit deal.”

Alternatively, odds favoring the continued existence of the Bank of Japan’s (BoJ) easy money policy challenge the GBP/JPY bears. That said, the incoming Bank of Japan (BoJ) Deputy Governor Shinichi Uchida testified before the Japanese parliament’s Upper House while defending the central bank’s easy money policy. In doing so, Uchida rules out hopes of altering the 2.0% inflation target, as well as hopes of bolstering the Yield Curve Control (YCC) policy. Earlier in the day, BoJ Deputy Governor Masazumi Wakatabe said, “Central banks must remain on guard against the potential dangers of secular stagnation and low inflation as price rises driven by cost-push factors do not last long,” per Reuters.

It should be noted that the mixed Japan data and yields fail to offer clear directions to the pair traders. That said, Japan’s Industrial Production shrunk 4.6% in January versus -2.6% expected and 0.3% prior growth. However, the Retail Trade grew 1.9% MoM on a seasonally adjusted basis from 1.1% prior and -0.2% market forecasts.

Against this backdrop, the US 10-year and two-year Treasury bond yields regain upside momentum around 3.93% and 4.80% respectively, despite being lackluster of late. Further, the S&P 500 Futures also trace Wall Street’s gains by the press time.

Looking ahead, Brexit headlines and BoJ updates are key to watch for the GBP/JPY pair traders for clear directions.

The monthly bullish channel keeps GBP/JPY buyers hopeful even as the overbought RSI hints at a pullback toward the 200-DMA support of 163.40.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 164.14 at the time of writing. Pair opened at 164.29 and is trading with a change of -0.09% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 160.6, 50 SMA 160.05, 100 SMA @ 163.6 and 200 SMA @ 163.36.

The previous day high was 164.31 while the previous day low was 162.61. The daily 38.2% Fib levels comes at 163.66, expected to provide support. Similarly, the daily 61.8% fib level is at 163.26, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 163.16, 162.04, 161.46
• Pivot resistance is noted at 164.87, 165.44, 166.57

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