The currency pair GBPJPY trading at 181.718 is observed to be consolidating its recent significant increase to its peak level since December 2015.

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• GBP/JPY is seen consolidating its recent strong gains to the highest level since December 2015.

The pair currently trades last at 181.718.

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 cross enters a bullish consolidation phase on Monday and oscillates in a narrow range around the 181.80-181.25 area, or just below its highest level since December 2015 touched during the Asian session.

The Japanese Yen (JPY) continues to be undermined by the Bank of Japan’s (BoJ) dovish stance, which, in turn, is seen as a key factor acting as a tailwind for the GBP/JPY cross. It is worth recalling that the Japanese central bank decided to leave its ultra-loose policy settings unchanged on Friday and kept intact its view that inflation will slow later this year. As was anticipated, the BoJ held its short-term interest rate target at -0.1% and made no changes to its yield curve control policy to support the fragile domestic economy.

In contrast, the Bank of England (BoE) is expected to hike the benchmark rates by 25 bps on Thursday, to 4.75% or the highest since April 2008. Moreover, the markets are pricing in the possibility of a bigger, 50 bps lift-off, which, continues to lend support to the British Pound and the GBP/JPY cross. Bulls, however, seem reluctant to place fresh bets and prefer to move to the sidelines ahead of this week’s key data/central bank event risks – the release of the latest consumer inflation figures from the UK and the BoE policy meeting.

Apart from this, a generally softer tone around the equity markets offers some support to the safe-haven JPY and contributes to capping the upside for the GBP/JPY cross, at least for the time being. That said, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the upside and any meaningful pullback might still be seen as a buying opportunity. In the absence of any relevant market-moving economic releases on Monday, the cross seems more likely to prolong its sideways consolidative price move.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 181.82 at the time of writing. Pair opened at 181.87 and is trading with a change of -0.03 % .

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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