The GBPJPY pair is currently trading at 181.858 and hovering around the 182.00 mark, which is the highest it has been in seven years. The attention has now turned towards the inflation situation in the UK.

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• GBP/JPY is auctioning around seven-year highs at 182.00 as the focus shifts to UK inflation.

The pair currently trades last at 181.858.

The previous day high was 182.04 while the previous day low was 178.83. The daily 38.2% Fib levels comes at 180.82, expected to provide support. Similarly, the daily 61.8% fib level is at 180.06, expected to provide support.

The GBP/JPY pair is hovering around a fresh seven-year high around 182.00 in the European session. The cross has remained in the positive trajectory as the Bank of Japan (BoJ) kept its interest rates unchanged at -0.15 and its yields under the 0.5% boundary.

BoJ Governor Kazuo Ueda decided to keep the monetary policy unaltered as more stimulus is required to stem inflationary pressures from domestic factors. Current inflationary pressures in Japan are supported by higher import prices and the BoJ wants to exchange the source by elevating wages and domestic demand.

The need to maintain Japan’s inflation above 2% can be achieved by keeping the monetary policy expansionary.

Meanwhile, sheer strength in the Pound Sterling is coming from expectations that United Kingdom’s inflation will remain stubborn as labor market conditions have tightened further. As per the preliminary report, monthly headline inflation (May) has grown at a pace of 0.4%, slower than the pace of 1.2% registered in April. Annualized headline CPI is seen softening to 8.5% vs. the prior release of 8.7% while core inflation that excludes oil and food prices is seen steady at 6.8%.

UK Finance Minister Jeremy Hunt showed reluctance while discussions about providing fiscal support to households to offset the impact of high mortgage prices, as reported by the Financial Times. Fiscal support to the economy could dampen the impact of tight monetary policy by the Bank of England (BoE) and could fuel inflationary pressures.

The UK inflation release will be followed by the interest rate decision from BoE Governor Andrew Bailey, which is expected to remain severely hawkish.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 181.71 at the time of writing. Pair opened at 181.87 and is trading with a change of -0.09 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 174.64, 50 SMA 171.02, 100 SMA @ 166.41 and 200 SMA @ 165.13.

The previous day high was 182.04 while the previous day low was 178.83. The daily 38.2% Fib levels comes at 180.82, expected to provide support. Similarly, the daily 61.8% fib level is at 180.06, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 179.78, 177.7, 176.57
• Pivot resistance is noted at 183.0, 184.13, 186.21

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