Market Spotlight: GBPJPY Threatens To Break Lower

GBJPY Sitting On Major Support LevelThe recent sell off in GBJPY has seen the market collapsing from the October highs around 157.88 to current lows around 149.39. Price is now sitting on a major band of support between the 148.49 level and the 149.39 level, as well as the retest of the broken bear channel. GBP sentiment has shifted sharply in recent weeks following the BOE’s lacklustre November meeting and the developments with Omicron since then (including fresh restrictions) as well as more political scandals for the government. With the retail market around 70% long the pair, there is room for the current sell off to deepen. On a break of the 148.49 lows bears can target a move down to 146.00 initially and 144.80 thereafter.Keep An Eye OnThe BOE meeting next week will be the main data focus (along with UK CPI ahead of the event). Should the BOE hold off on a rate hike, in light of the uncertainty around Omicron and the government’s fresh restrictions, this is likely to be reflected in a lower GBP. On the other hand, if the BOE surprises and pushes ahead with a rate hike, or if guidance is firmly bullish, this might help lift GBP in the near term.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-gbpjpy-threatens-to-break-lower"
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