GBP/JPY Price Analysis: Prepares for a fresh downside below 171.40

• GBP/JPY is demonstrating topsy-turvy moves above 171.40.
• Inflationary pressures in the UK economy are not in the mood to ditch the double-digit territory.
• BoJ Ueda believes that Japan's inflation is likely to slow back below 2% in the middle of the current fiscal year.

The GBP/JPY pair is displaying a topsy-turvy move in a narrow range above 171.40 in the early European session. The cross is expected to remain extremely volatile as the street is mixed over further interest rate hikes by the Bank of England (BoE).

Inflationary pressures in the United Kingdom economy are not in the mood to ditch the double-digit territory despite BoE Governor Andrew Bailey is consistently raising interest rates which have pushed them to 4.50%.

Meanwhile, the Bank of Japan (BoJ) is expected to keep the interest rate policy ultra-dovish. BoJ Governor Kazuo Ueda believes that Japan's inflation is likely to slow back below 2% in the middle of the current fiscal year.

GBP/JPY has faced immense pressure while attempting to cross the crucial resistance plotted from May 02 high at 172.33 on a two-hour scale. The cross is forming a volatility contraction pattern, which is expected to explode sooner and a sheer move will be witnessed.

The asset is hovering near the 20-period Exponential Moving Average (EMA) at 171.67, indicating a sideways performance.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bullish range of 60.00-80.00, which signals a loss in the upside momentum.

A breakdown below May 18 low at 171.25 will drag the asset toward May 09 low at 169.85. A slippage below the latter will further drag the asset toward May 03 low at around 169.14.

On the flip side, a confident move above the previous week's high at 172.33 will support the cross to print at a fresh seven-year high of 173.00 followed by 25 January 2016 high at 174.18.

GBP/JPY two-hour chart