GBJPY In Holding Pattern

GBPJPY price action is starting to look very interesting here. Price is has been sitting in a tight range just under the 157.88 highs over the last week. While there are clear double-top risks, given the strength of the recent rally, and with the retail market still overwhelmingly short here, I’m looking instead for an upside break. Price recently tested below the 156.06 support and found decent demand. With this in mind I’m watching for a break of the 157.88 level targeting a run up to the 159.98 level next.

Keep An Eye On

UK CPI data due on Wednesday is the key data focus for this pair. With UK prices forecast to have increased again over December, there is plenty of room for further GBP buying as the market refocuses on BOE tightening expectations and away from omicron risks. Keep an eye on equities prices also as better risk appetite should keep JPY subdued via a lack of safe have inflows.