GBPJPY Trades Sideways; Awaits BoE Decision

On Thursday, the Bank of England is expected to raise the primary refinancing rate to 0.5%, possibly supporting the GBPUSD pair and sending it over the 1.35 threshold. 

In that case, the GBPJPY cross could shoot above the strong resistance at 157.90, where previous lows are located. Stop-losses of short positions would be hit, likely pushing the Pound further lower, targeting the psychological threshold of 160 for the first time since June 2016. 

Alternatively, if we see a dovish surprise during the BoE meeting, the cross could decline to the 50-day moving average (the purple line) or possibly to the 200-day moving average (the green line). 

Should the pair decline below those supports, it might fall back to the 149 zone, where previous lows are.

Since the cross trades within a large consolidation channel, jumping into the market in the middle of the zone seems unwise. Thus, investors will likely wait for the outcome of the BoE to set direction. 

Technically speaking, if the GBPJPY cross advances above the upper line near 158, we might see another significant long higher from the medium-term point of view.