GBPJPY has formed lower highs and higher lows, creating a symmetrical triangle pattern visible on its hourly chart. Price is currently testing the resistance and might be due for a breakout soon.

A move past the triangle top around the 150.50 minor psychological mark could set off a climb that’s the same height as the chart formation. However, technical indicators are suggesting that resistance is more likely to hold than to break.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that a move back to the bottom at 150.00 could follow.

RSI is also turning lower without even reaching the overbought zone, suggesting that sellers are eager to return. Stochastic is already making a move below the overbought region, which means that buyers are exhausted and letting sellers take over.

A break below the triangle bottom could set off a slide that’s the same size as the triangle, which spans around 200 pips.

The BOE decision later this week could spur a breakout for GBPJPY, especially if the central bank shifts back to a more cautious stance due to the Omicron variant. Some hawkish members already toned down their calls for tightening, even though price pressures remain strong.

The BOJ is also due for its policy decision much later in the week, but this is expected to be a non-event. After all, the Japanese central bank’s hands are tied in terms of stimulus since the economy is still recovering from the pandemic.

Risk appetite might also push this pair around during the FOMC decision later today, as any changes to economic forecasts and the dot plot projection of interest rates could influence demand for safe-haven assets like the Japanese yen.