• The BoE left interest rates unchanged as expected at the last meeting
  with no dovish language as they reaffirmed that they will keep rates high for
  sufficiently long to return to the 2% target.
• The latest employment report showed job losses in December and
  lower than expected wage growth.
• The UK CPI beat expectations across the board, which is
  going to reinforce the BoE’s neutral stance.
• The latest UK PMIs showed the Manufacturing sector improving but
  remaining in 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 May.

JPY

• The BoJ kept its monetary policy unchanged as expected 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 but he’s becoming more optimistic on
  achieving their 2% target.
• The Japanese CPI eased further across all measures
  which makes it even harder to expect a rate hike from the BoJ anytime soon.
• The latest Unemployment Rate ticked lower hovering around cycle
  lows.
• The Japanese PMIs improved for both the Manufacturing
  and Services measures although the former remains in contractionary territory.
• The latest Japanese wage data missed expectations by a big margin
  and as a reminder the BoJ is focusing on wage growth to decide whether to tweak
  its monetary policy.
• The Tokyo CPI, which is seen as a leading
  indicator for National CPI, fell much more than expected.
• The market expects the BoJ to hike
  rates in Q2.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPJPY rejected
the cycle high at 188.67 as the sellers stepped in with a defined risk above
the level to position for a drop into the 184.28 support. The
price has been consolidating around the cycle high but recently we got a
breakout, which might be a bad omen for the buyers.

GBPJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair has
been trading inside a rising channel into the cycle high and once we got the
breakout, the pair started to consolidate between the cycle high and the 187.30
level. This week though the price broke out and the sellers should now increase
their bearish bets into the 184.28 support. The buyers, on the other hand, will
want to see the price getting back above the support now turned resistance to
invalidate the bearish setup and position for a rally back into the cycle high
targeting a breakout.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bearish setup with the price breaking out of the range and rallying
back to retest the resistance before falling back again. If the price were to
break below the 186.90 level, we can expect even more offers coming into the
market.

Upcoming Events

Today we have the US ADP and the US Employment Cost
Index before the FOMC rate decision later in the day. Tomorrow, we have the BoE
rate decision followed by the latest US Jobless Claims figures and the ISM
Manufacturing PMI. On Friday, we conclude the week with the US NFP report.

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