Price movements on the chart of the GBP/JPY currency pair last week reached their highest level since December 2015 as the Yen remained weak after the decision of the Bank of Japan's policy meeting was scrutinized.
The Bank of Japan (BOJ) which has kept interest rates low with a policy that remains loose has pushed the yen's continued decline.
Meanwhile, the Pound, which took the opportunity to strengthen, began trading cautiously this week ahead of the central bank of England (BOE) policy meeting.
UK inflation data published at the start of the European session today (Wednesday) saw the UK consumer price index (CPI) remain at 8.7%, missing expectations for a drop to 8.4%.
This will further strengthen expectations for an interest rate hike by the BOE at the latest meeting and make the Pound stronger.
On the GBP/JPY chart, the price which had reached a high of 182.00 at the end of last week started to move flat and slow at the opening of the week.
However, on Tuesday yesterday, the price began to display a downward pattern and moved below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/JPY chart, signaling a change to a bearish trend.
The bullish pattern is starting to show again today with prices seen testing the MA50 barrier after UK CPI data is published.
If the rise continues, the price will challenge the high reached last week to record the latest record again.
On the other hand, if the increase fails to hold, the price can make a decline towards the 179.00 level.
An extended lower decline is seen to reach around 176.00 with a more pronounced bearish move.
