Today, Thursday, the GBP/JPY pair is struggling to hold above the 20-day SMA. Market participants are refraining from opening active positions ahead of updated monetary policy signals from the Bank of England.

Previously, the market had priced in a high probability of two interest rate cuts by the Bank of England this year. However, traders are now revising their expectations and are assigning a noticeable probability to a rate hike in November, reflecting the impact of the energy shock caused by the escalation of the conflict in the Middle East. Therefore, attention should be paid to the Bank of England's accompanying monetary policy statement, which may adjust inflation expectations and provide a significant impulse to the GBP/JPY exchange rate.

Monthly employment data from the UK will also influence the British pound and, consequently, the GBP/JPY pair, setting either a more hawkish or dovish tone for domestic monetary expectations.

At the same time, the Bank of Japan kept its interest rate unchanged following its March meeting, emphasizing concerns that rising oil prices amid geopolitical tensions could restrain economic activity and undermine the fragile recovery.

Meanwhile, growing uncertainty in the region supports the Japanese yen's status as a traditional safe-haven asset, which limits the upward potential of the GBP/JPY cross and increases pressure on the pair.

At the same time, the market shows relatively high confidence that the Bank of Japan will continue its policy normalization path. Combined with concerns that Japanese authorities may intervene in the market to prevent further weakening of the national currency, this supports the yen. This combination of factors may limit the scale of movements in the GBP/JPY pair, requiring caution from aggressive speculators.

From a technical perspective, the pair remains above the 20-day SMA. The major moving averages are also sloping upward. At the same time, oscillators are in positive territory, indicating that bulls dominate the market. However, it is worth noting that oscillators are close to neutral levels, which suggests that bullish traders should be cautious and wait for a clear upward impulse before opening aggressive positions.