GBP/JPY consolidating below 157.00 level ahead of BOE announcement

The GBP/JPY pair is consolidating its Wednesday's reversal from 158.00 handle and is currently trading below 157.00 level ahead of the BOE announcements.

The pair's near-term recovery from sub-154.00 level stalled on Wednesday at 158.00 handle on softer-than-expected UK manufacturing and industrial production data. The pair, however, held and bounced-off 156.00 level on broad JPY weakness. A dovish BOE coupled with the ongoing concerns over the 'Brexit' and disappointing UK economic data would force traders to unwind their GBP bullish bets, thus keeping the GBP/JPY capped in the near-term.

The pair is currently hovering below 157.00 level and on short-term chart (H1) seems to face strong resistance near 157.30-35 horizontal zone. In order to increase the prospects of further recovery, the pair needs to decisively break through this immediate resistance.

Technical levels to watch

Above 157.30-35 resistance, the pair seems to immediately aim towards conquering 158.00 handle resistance and head towards 50-day SMA resistance near 158.40-50 region.

Alternatively, sustained weakness below 156.50 level is likely to accelerate the fall immediately to sub-156.00 level (155.85-80 support), which if broken might again force the pair to retest the mid-point of 155.00-154.00 levels.