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  • BOJ Minutes fuel the quote towards breaking short-term triangle resistance amid Brexit political noise.
  • The UK CPI will be important for predicting near-term moves.

The GBP/JPY pair is on bids around 148.00 during initial Tokyo session on Wednesday. Although political noise surrounding Brexit has been challenging pair’s upside since over a week, recently released BOJ minutes favored the buyers. The quote has been struggling to successfully clear 148.00 resistance that holds the gate for its rise toward 148.90 and 149.00 numbers to the north.

Although the British members of parliament (MPs) tamed intermediate Brexit pessimism by rejecting no-deal departure and supporting an extension for the leave beyond March 29, the lawmakers are still falling short to support the PM May in availing grace period from the EU. Recently, speculations concerning how much time period PM May will seek from the regional leaders and on what basis they would grant her extension are driving the GBP moves.

On the other hand, minutes of the Bank of Japan’s (BOJ) monetary policy meeting played its role off-late. The minutes report showed Japanese policymakers are in quite disagreements over the present course of policy and inflation targets with their colleagues. GBP/JPY surged nearly 10 pips after the announcement.

In addition to the Brexit and FOMC updates’ ability to govern risk sentiment and pair prices, February month consumer price index (CPI) from the UK can also become an important indicator to watch.

The CPI YoY bears the consensus to remain unchanged at 1.8% but CPI MoM could rise to +0.5% from -0.8%. Also, the US Fed is widely expected not to offer any policy surprise which shifts market attention to its quarterly economic projections.

GBP/JPY Technical Analysis

Sustained break of 148.00 is required for GBP/JPY to aim for 148.90 and 149.00 whereas 61.8% Fibonacci expansion (FE) of March 12-18 moves at 149.70 followed by 150.00 round-figure could please buyers then after.

Meanwhile, an upward sloping supportline stretched since March 11 can offer immediate rest to pair at 147.50 during pullback, breaking which 146.70 and 146.30 might return to the chart.