#GBPJPY @ 167.559 has shown a recovery move from 167.36 as stubborn UK Inflation supports more rate hikes from the BoE. (Pivot Orderbook analysis)

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• GBP/JPY has shown a recovery move from 167.36 as stubborn UK Inflation supports more rate hikes from the BoE.
• UK’s inflation has remained highest among G7 nations led by a shortage of labor, and energy shock.
• The BoJ is buying government debt as part of expansionary monetary policy.

The pair currently trades last at 167.559.

The previous day high was 167.98 while the previous day low was 166.49. The daily 38.2% Fib levels comes at 167.41, expected to provide support. Similarly, the daily 61.8% fib level is at 167.06, expected to provide support.

The GBP/JPY pair has rebounded after printing a day’s low of 167.36 in the Asian session. The cross has shown a recovery as fears associated with the bulky United Kingdom inflation report are getting traction again. The Pound Sterling drove the cross dramatically higher on Wednesday after the release of the UK Consumer Price Index (CPI) confirmed that the rate-hiking spell by the Bank of England (BoE) would continue further.

The release of the UK inflation showed that headline CPI has trimmed marginally to 10.1% from the prior release of 10.4% led by a decline in energy prices used for heating and electricity. However, investors are not satisfied with the decline in the inflationary pressures as the figure failed to ditch the double-digit territory again. Meanwhile, food price inflation has soared to a fresh 45-year high at 19.1%.

UK’s inflation has remained highest against other Group of Seven (G7) nations led by a shortage of labor due to the Brexit event and election of an early-retirement plan, and energy shock. The International Monetary Fund (IMF) has forecasted UK Inflation at an average of 6.8% for 2023, the highest among major advanced economies.

Analysts at Standard Chartered see the Bank of England raising the key interest rate by 25 basis points in May. They further added, “Beyond May, we see the potential for additional hikes, but we think the MPC will take a meeting-by-meeting approach and decisions will be heavily dependent on how economic data evolve month-to-month.”

On the Japanese Yen front, to augment the expansion of stimulus in the economy, novel Bank of Japan (BoJ) Governor Kazuo Ueda said in the Japanese parliament on Tuesday, “The BoJ is buying government debt as part of monetary policy.” He further added the intention of bond purchase is not of monetizing government debt.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 167.46 at the time of writing. Pair opened at 167.58 and is trading with a change of -0.07 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 164.34, 50 SMA 162.95, 100 SMA @ 162.19 and 200 SMA @ 163.26.

The previous day high was 167.98 while the previous day low was 166.49. The daily 38.2% Fib levels comes at 167.41, expected to provide support. Similarly, the daily 61.8% fib level is at 167.06, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 166.72, 165.86, 165.24
• Pivot resistance is noted at 168.21, 168.83, 169.69

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