Anna 
During the European session, the GBP/JPY cross experienced an uptake as dip-buyers emerged near the 186.15 area, rebounding from the weekly low established on Wednesday. The positive momentum persisted through the first half of the session, propelling spot prices to a fresh daily high in the last hour. Bullish sentiment aims to extend beyond the 200-hour Simple Moving Average (SMA) and breach the key 187.00 round-figure mark.
Investor confidence received a boost from the prospect of an Israel-Hamas ceasefire, raising hopes for a de-escalation of tensions in the Middle East. This development contributed to the relative underperformance of the safe-haven Japanese Yen (JPY). Conversely, the British Pound (GBP) benefited from the ongoing pullback of the US Dollar (USD) from its nearly three-month peak. As a result, the GBP/JPY cross gained over 85 pips from the daily trough.
Despite concerns about the Bank of England (BoE) potentially reducing interest rates in 2024, GBP bulls remained resilient. BoE’s Chief Economist, Huw Pill, indicated on Tuesday that interest rates could decrease this year as a response to the economy successfully curbing inflation. Andrew Bailey, BoE Governor, echoed optimistic sentiments last week, emphasizing that things are moving in the right direction, and the current bank interest rate level is appropriate.
While Bailey hinted at the readiness to ease policy, Deputy Governor Sarah Breeden, on Wednesday, expressed reduced concerns about tightening the bank rate further. Her focus shifted to the duration rates should remain at their current level. Despite these considerations, the GBP/JPY cross faced little resistance, although the Bank of Japan’s (BoJ) earlier hawkish stance in the month might temper fresh bullish bets.
