#GBPJPY @ 161.241 has sensed a buying interest around 161.00 as the BoJ has reiterated the need for an easy policy. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• GBP/JPY has sensed a buying interest around 161.00 as the BoJ has reiterated the need for an easy policy.
• Higher food prices and a shortage of labor have been major drivers for the extremely sticky UK inflation.
• The BoE could continue its interest rates hiking spell by 25 bps ahead.

The pair currently trades last at 161.241.

The previous day high was 162.19 while the previous day low was 160.12. The daily 38.2% Fib levels comes at 160.91, expected to provide support. Similarly, the daily 61.8% fib level is at 161.4, expected to provide resistance.

The GBP/JPY pair has picked strength after defending the crucial support of 161.00 in the early Tokyo session. The cross is looking to extend its gains further above 161.70 as the expectations of an exit from the ultra-loose monetary policy by the Bank of Japan (BoJ) have faded dramatically.

The release of the BoJ Summary of Opinions associated with March’s monetary policy meeting on Monday indicated that board members advocated the need to maintain an ultra-loose monetary policy for now, even as some warned of the need to scrutinize its side effects such as deteriorating market functions, as reported by Reuters.

Going forward, Friday’s Japan inflation data will be keenly watched. As per the estimates, the annual headline Consumer Price Index (CPI) will decline to 4.1% from the former release of 4.3%. And, the core CPI that excludes oil and food prices is expected to jump to 3.4% vs. the prior release of 3.2%. Scrutiny of inflation estimates indicate that the impact of higher energy and food prices is declining, however, the impact of higher import prices is still persistent. Also, recent efforts made by the Japanese administration to increase wages to keep inflation steady at desired levels could have fueled the core CPI.

On the United Kingdom front, investors are awaiting the release of the UK’s inflation, which is scheduled for Wednesday. Higher food prices and a shortage of labor have been major drivers for the extremely sticky UK inflation. No doubt, the UK administration has proposed some measures to push individuals to delay their retirement plans. However, sufficient time will be required for efficient execution.

This week, the major trigger will be the interest rate decision by the Bank of England (BoE), which would unleash sheer volatility for the cross. Analysts at ING Global cite that despite encouraging signs that inflationary pressures are easing, the Bank of England will probably opt for one final 25 basis point (bp) hike on Thursday if it can, though that’s undoubtedly contingent on what happens in financial markets. Remember that the BoE has set a much lower bar for pausing hikes than the likes of the Federal Reserve (Fed) and the European Central Bank (ECB).

Technical Levels: Supports and Resistances

GBPJPY currently trading at 161.24 at the time of writing. Pair opened at 160.51 and is trading with a change of 0.45 % .

The pair is trading below its 20 Daily moving average @ 162.62, above its 50 Daily moving average @ 160.88 , below its 100 Daily moving average @ 162.89 and below its 200 Daily moving average @ 163.31

The previous day high was 162.19 while the previous day low was 160.12. The daily 38.2% Fib levels comes at 160.91, expected to provide support. Similarly, the daily 61.8% fib level is at 161.4, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 159.69, 158.87, 157.62
• Pivot resistance is noted at 161.76, 163.01, 163.83

[/s2If]
Join Our Telegram Group