GBP/JPY Rebounds on UK Inflation Outlook. Long Setup

The GBP/JPY pair has exhibited a recuperative trend subsequent to hitting a low of 167.36 during the Asian trading session. This upswing can be attributed to the persistent UK inflation, which is compelling the Bank of England to pursue more rate hikes. The UK is experiencing the highest inflation rate among G7 countries, fueled by a scarcity of labor and energy price shocks.

Meanwhile, the Bank of Japan is implementing an expansive monetary policy that includes purchasing government bonds. Our analysis indicates that the price of the GBP/JPY pair has undergone multiple rebounds on the dynamic trendline, and the most recent breakout of the bullish flag confirms that it is moving in the direction of the main trend. Thus, we anticipate a continuation of the bullish rally today.

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