• The BoE left interest rates unchanged as expected with no dovish language
  as they reaffirmed that they will keep rates high for sufficiently long to
  return to the 2% target.
• Governor Bailey pushed back against rate cuts
  expectations as he said that they cannot say if interest rates have
  peaked.
• The latest employment report missed forecasts with wage growth
  coming in much lower than expected and job losses in November.
• The UK CPI today missed expectations across the board,
  which is another welcome development for the BoE.
• The UK PMIs showed the Manufacturing sector falling
  further into contraction while the Services sector continues to expand.
• The latest UK Retail Sales missed expectations across the
  board by a big margin as consumer spending remains weak.
• The market expects the BoE to start
  cutting rates in Q2 2024

JPY

• The BoJ kept its monetary policy unchanged with interest rates at -0.10% and
  the 10 year JGB yield target at 0% with 1% as a reference cap.
• Governor Ueda repeated once again that they won’t
  hesitate to take easing measures if needed and that they are not foreseeing
  sustainable price increases unless wage growth picks up.
• The latest Japanese CPIshowed that inflationary pressures
  are easing although they remain well above the BoJ’s 2% target.
• The latest Unemployment Rate remained unchanged near cycle lows.
• The Japanese Manufacturing PMI fell further into contraction but
  the Services PMI ticked higher remaining in expansion.
• The latest Japanese wage data beat expectations and as a reminder
  the BoJ is focusing on wage growth to decide whether to tweak its monetary
  policy.
• The market expects the BoJ to hike
  rates in Q2 2024.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPJPY pulled
back to the resistance zone
around the 184.00 handle where we had also the red 21 moving average for confluence. The
sellers stepped in with a defined risk above the resistance to position for a
drop into the 176.32 level and further added to the bearish bets following
today’s miss in the UK CPI data.

GBPJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have an
upward trendline around
the 181.00 handle where the buyers might try to lean onto to fade the latest
drop and position for a rally back into the 184.00 resistance. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 176.32 level.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action with the pair approaching the trendline. This
is where the battle between the buyers and sellers should get more interesting
as a break to the downside should see the bearish momentum increasing and
leading to a drop into the 176.32 level.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. Today, we have the US Consumer Confidence reports.
Tomorrow, we get the latest US Jobless Claims figures, while on Friday we
conclude the week with the Japanese CPI, the UK Retail Sales and the US PCE data.

This article was written by FL Contributors at www.forexlive.com.