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The highly-anticipated BOE decision is coming up, forex fellas!

Will the triangle support on GBP/JPY hold during the big event?

Before moving on, ICYMI, yesterday’s watchlist checked out the bearish pullback on USD/JPY ahead of the FOMC decision. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

FOMC hiked interest rates by 25bps from 4.50% to 4.75% as expected

Fed statement: “Inflation has eased somewhat but remains elevated”

Powell: Could halt tightening after “a couple more rate hikes”

Powell: “Disinflationary process has started”

BOJ Deputy Gov Wakatabe: No change in commitment to continue easing

New Zealand Dec building consents slipped by 7.2% y/y after earlier 6.7% gain

Australian Dec building approvals rebounded by 18.5% m/m after previous 8.8% drop

German trade surplus narrowed from 10.9B to 10.0B EUR in Dec vs. projected 9.2B EUR

Upcoming Potential Catalysts on the Forex Economic Calendar:

BOE monetary policy report & MPC minutes at 12:00 pm GMT
ECB interest rate decision at 1:15 pm GMT
ECB press conference at 1:45 pm GMT
ECB President Lagarde’s speech at 3:15 pm GMT
SNB head Jordan’s speech at 5:30 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: GBP/JPY

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart by TradingView

Feeling gutsy enough to trade the news today?

Check out this potential triangle support test on Guppy ahead of the BOE decision!

The pair is inching closer to the bottom around the 159.00 major psychological mark, and technical indicators are giving mixed signals so far.

Stochastic is already indicating exhaustion among sellers and is starting to pull higher to suggest that buyers are about to return. If that’s the case, GBP/JPY could bounce off the triangle bottom and make its way back to the top.

However, the 100 SMA is below the 200 SMA to hint that there’s a chance support might break. If that happens, the pair might be in for a selloff that’s the same height as the chart pattern.

That’s roughly 500 pips yo!

Then again, it’s important to note that the gap between the moving averages has narrowed enough to signal a potential bullish crossover.

Of course it all boils down to what BOE policymakers have up their sleeve, as any major shift in their stance could determine where pound pairs are headed next.

The consensus is for another 0.25% hike, but at least a couple of dissenters are likely to push for a more cautious move. More votes joining the not-so-hawkish camp might mean downside for the British currency, given how the economy is struggling with low growth conditions.

Meanwhile, the BOJ has been pretty clear about sticking to its easing plans, as Deputy Governor Wakatabe cited.

Don’t forget to practice proper risk management if you’re trading this pair during the BOE event!