GBPJPY pair experienced a lot of volatility in the morning as traders digest latest UK data and speculations regarding BoJ Kuroda successor. GDP figures showed that UK economy stalled in the final quarter of 2022, with living standards hammered by a surge in inflation and reflecting the impact of strikes, which came in line with the Bank of England warnings that Britain would likely enter a shallow but lengthy recession, starting in the first quarter of this year and lasting more than a year. At the same time, Yen appreciated strongly on news that Kazuo Ueda may become the next BOJ governor. There is little known about his current views regarding monetary policy, however back in 2016 he was not overwhelmly enthusiastic about Abenomics and the BOJ bond purchases program. Initially news regarding Ueda nomination strengthened yen, however moods reversed after he told NTV that current BoJ's monetary policy is appropriate and central bank needs to continue easy policy.
From technical point of view, GBPJPY pair fell sharply towards the crucial support zone at 157.88, which coincides with 61.8% Fibonacci retracement of the last upward wave started in September 2022 and lower limit of the triangle formation. Should break lower occur, sell-off may deepen towards next support at 154.00, which is marked with 78.6% retracement. However moods reversed after Ueda latest dovish comments and the pair is approaching the upper limit of the triangle formation which is additionally strengthened by 200 SMA (red line). If buyers manage to fully regain control and push price higher, then next resistance to watch can be found around 50.0% retracement at 160.65.
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GBPJPY, H4 interval. Source: xStation5
