GBPJPY False Downside Break Gives Bulls Hope

GBPJPY Sitting on Key SupportGBPJPY price action is looking interesting here. The pair is essentially trading in range between 179.95 and 184.33, reflecting a pause in upside momentum on the back of the bull move off the YTD lows. We recently saw a failed downside break of the range, with the market quickly reversing higher to trade back above 179.95, suggesting that an eventual topside break is now the preferred play.Shifting BOE ExpectationsLast week, the BOE hiked rates by a further .25% while signalling that further tightening might still be coming. However, this was anmuch less unified meeting from the bank with some members voting in favour of a larger hike while some were in favour of holding rates unchanged. As such, there is clear two-way risk around GBP going forward. If inflation is seen to continue falling, this should reduce near-term BOE tightening expectations, pulling GBO lower. However, if CPI is seen showing stickiness at current level, hawkish BOE expectations should drive GBP higher near-term.Caution Around BOJOn the JPY side of the equation, the main focus is the BOJ. While the bank held policy unchanged at its latest meeting, it did make some operational tweaks (YCC band widened) which many have seen as potentially laying the groundwork for a forthcoming policy shift. If this narrative gains more traction, JPY might start to rally on hawkish BOJ expectations, creating downside pressure for the pair.Technical ViewsGBPJPYFor now, the pair is holding above the 179.95 level support. Despite the downside break of the bull channel, the outlook remains bullish while price holds above this support level, putting the focus on a break above the 184.33 level and a continuation higher. To the downside, the next support is 176.35, ahead of deeper support all the way below market at 172.13. Notably, we have an active buy signal in the Signal Centre today from 179.50, targeting a move back up through 182.Signal Centre is a proprietary trading-signal suite offered to all Tickmill traders. Signal Centre combines human and AI driven analysis to offer traders actionable entry and exit points that they can use for their trading strategies. Signals are offered across a range of asset classes including Forex, Stocks, Commodities and Crypto.