GBP/JPY has been trapped in a trading range of 144.00 to 147.00. Nevertherless, the pair managed to gain bullish momentum off the support area indicating further upward pressure in the process.

GBP is expected to be indecisive as the Brexit deal has bot been reached yet. At the same time, Prime Minister Theresa May is making efforts to reach an agreement with the Labor Party. The current market structure of GBP/JPY is showing bearish pressure but the actual scenario depends on the outcome of the Brexit negotiations. The slow-burn Brexit impact on the British economy is the biggest barrier to economic growth for the rest of 2019. The delay in resolving the UK's status in the EU is the main reason why the Bank of England refrains from raising interest rates.

The BOE downgraded growth forecasts for the UK to 1.3% for 2019 and 1.5% for 2020. The GDP growth is expected to be 0.2% in the 1st Quarter of 2019 while the inflation rate is likely to be steady below the 2% target. Average Hourly Index was unchanged at 3.5% along with the unemployment rate at 3.9%. The Consumer Price Index turned out to be weaker than expected at 1.9%. The Producer Price Index dropped to -0.2% from previous data of 1.0%. The only surprising data was the retail sales which surged to 1.1% from the previous value of 0.6%.

The Bank of England is due to announce the policy decision tomorrow. The official interest rate is widely expected to be left unchanged at 0.75%. The monetary policy statement along with the speech of Governor Carney will be a significant market mover for the UK but the main focus for the investors will be the decision on Brexit.

On the JPY side, this week was quite silent for Japan's financial markets as they are closed for the most part of the week on public holidays. AT the latest policy meeting, the Bank of Japan maintained the key policy rate at a record low. BOJ Governor Kuroda made optimistic remarks on the domestic economy. Thus, JPY is expected to regain momentum after certain corrections along the way. The BOJ decided to examine the uncertainties about the economic activity along with the effect of the scheduled consumption tax hike. Besides, Japan's central bank plans to continue the QQE on an extreme level. The extreme monetary easing might make the JPY weaker against all other major currencies.

The US-Japan trade talks are going to shape the upcoming economic development on both sides. Japan's economy has already suffered from the trade war and a slowdown in the global economy. Japan's monetary authorities are going to raise its sales tax hike to 10 percent in October from the current 8 percent after Prime Minister Shinzo Abe has twice postponed it. The last sales tax was lifted from 5 percent in 2014 that dealt a blow to private consumption, which accounts for about 60 percent of Japan's GDP.

Tomorrow Japan's Flash Manufacturing PMI report is going to be published which is expected to be unchanged at 49.5.

To sum it up, JPY is winning favor with investors. However, it failed to dominate GBP along the way that indicates strength of GBP. This week, the pair is going to trade with higher volatility. The policy meeting of the Bank of England will clear up market sentiment on GBP in the coming days.

Now let us look at the technical view. The price is currently heading towards 146.50-147.00 resistance area after a strong bounce off the 144.00 support area recently. MACD is showing a bullish crossover in progress while also forming a Bullish Divergence. This confirms further upward pressure in the coming days. As the price remains above 144.00 area with a daily close, the pair is going to trade under bullish pressure in the coming days.