#GBPJPY @ 163.804 is on the verge of overstepping the immediate hurdle of 164.00. (Pivot Orderbook analysis)

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• GBP/JPY is on the verge of overstepping the immediate hurdle of 164.00.
• The odds of widening BOE-BOJ policy divergence are supporting the pound bulls.
• Japan’s National CPI has landed higher at 3.0% vs. 2.6% as expected.

The pair currently trades last at 163.804.

The previous day high was 1.6787 while the previous day low was 1.6698. The daily 38.2% Fib levels comes at 1.6732, expected to provide support. Similarly, the daily 61.8% fib level is at 1.6753, expected to provide support.

The GBP/JPY pair is on the verge of overstepping the round-level resistance of 164.00 in the early Asian session. The asset has extended its gains after delivering an upside break of the consolidation formed in a narrow range of 162.78-163.60. The risk-sensitive currency has picked significant bids as risk-on impulse rebounds and is expected to advance further.

The cross is likely to deliver a fresh rally as the Bank of England (BOE)-Bank of Japan (BOJ) policy divergence is expected to widen further. The BOE is set to announce one more 50 basis points (bps) rate hike on Thursday as a step further to fixing the inflation chaos. The recent decline in the headline Consumer Price Index (CPI) to 9.9% vs. the expectation of 10.2% and the prior release of 10.1% is not going to trim the extent of the rate hike.

The UK inflation rate is near the double-digit figure, the highest among the G-7 nations, and is also facing an energy crisis. A significant decline in the price pressures is highly required otherwise it will continue to harm the confidence of the households, which are already forced to make higher payouts.

On the Tokyo front, the BOJ officials are worried over the prolonged depreciation of the Japanese yen and are expected to shift their stance this time. A prolonged ultra-dovish stance will conclude and the BOJ will approach the ‘neutral’ stance. But that does not warrant a drop in the BOE-BOJ policy divergence.

Meanwhile, the Statistics Bureau of Japan has reported the National CPI at 3%, higher than the forecasts and the prior release of 2.6%. Also, the core CPI that excludes food and oil prices has improved to 1.6% that the former figure of 1.2% but remained lower than the expectations of 1.7%.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 1.6821 at the time of writing. Pair opened at 1.6723 and is trading with a change of 0.59 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.6378, 50 SMA 1.63, 100 SMA @ 1.6443 and 200 SMA @ 1.6456.

The previous day high was 1.6787 while the previous day low was 1.6698. The daily 38.2% Fib levels comes at 1.6732, expected to provide support. Similarly, the daily 61.8% fib level is at 1.6753, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.6685, 1.6647, 1.6596
• Pivot resistance is noted at 1.6774, 1.6825, 1.6863

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