The GBPJPY pair shows increased strength around the 181.85 level following the important event regarding the Bank of Japan (BoJ).

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• GBP/JPY gains momentum around 181.85 after the Bank of Japan (BoJ) key event.

The pair currently trades last at 181.894.

The previous day high was 183.13 while the previous day low was 180.82. The daily 38.2% Fib levels comes at 181.71, expected to provide support. Similarly, the daily 61.8% fib level is at 182.25, expected to provide resistance.

The GBP/JPY cross surges to 181.80 after accelerating the downside momentum to a seven-week low of 180.70 during the Asian session on Friday. The rebound of the cross is bolstered by the Bank of Japan (BoJ) interest rate decision after central bank policymakers decided to maintain the current monetary policy unchanged.

After the highly-anticipated September monetary policy meeting, the Bank of Japan (BoJ) board members decided to keep its short-term interest rate target of -0.1% and its 10-year bond yield target of around 0%, as widely expected by the market. However, a divergence in monetary policy between the BoJ and the Bank of England (BoE) weighs on the Japanese Yen (JPY) and acts as a tailwind for the GBP/JPY cross.

Earlier on Friday, Japan’s National Consumer Price Index (CPI) for August came in at 3.2% YoY from 3.3% in July. Additionally, the National CPI ex Fresh Food improved from 3.0% in July to 3.1% in August, whereas the National CPI ex Food, Energy came in at 4.3% compared to 4.3% in previous readings.

The Bank of England (BoE) stunned market participants on Thursday by maintaining the benchmark rate at 5.25% rather than raising it by 25 basis points (bps) to 5.5% as anticipated. British central bank decided to pause its long run of interest rate hikes as the economy slowed and inflation decreased, but BoE Governor Andrew Bailey underlined that the central bank did not believe its work was over. He added that he would not forecast the BoE’s next action, but that it would be “very, very premature” to cut interest rates.

Moving on, the UK Retail Sales and Purchasing Manager Index (PMI) data will be released on Friday. The monthly Retail Sales for August are expected to improve from -1.2% to 0.5%, while Composite PMI is expected to rise from 48.6 to 48.7. Traders will take cues from these figures and find trading opportunities around the GBP/JPY cross.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 181.76 at the time of writing. Pair opened at 181.48 and is trading with a change of 0.15 % .

The pair is trading below its 20 Daily moving average @ 183.95, below its 50 Daily moving average @ 183.27 , above its 100 Daily moving average @ 179.96 and above its 200 Daily moving average @ 171.15

The previous day high was 183.13 while the previous day low was 180.82. The daily 38.2% Fib levels comes at 181.71, expected to provide support. Similarly, the daily 61.8% fib level is at 182.25, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 180.49, 179.5, 178.18
• Pivot resistance is noted at 182.8, 184.12, 185.11

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