GBP/JPY – No Taper Talk From The BOE

#OPINIONLEADER# #Signal#

 JUN 28, 2021

• BoE can better assess UK economic outlook in August meeting
• GBP/JPY heading south of 3-year high

Chart 1: GBP/JPY D1 chart

The market was hoping for some hawkish tone to be delivered by the Bank of England (BoE) during their monetary policy meeting last Thursday. Specifically, the market was looking forward to the mentioning of a QE tapering from the central bank. Unfortunately, the BoE did not deliver, mentioning in the statement that “the Committee will have the opportunity to assess the economic outlook more fully in the context of its August Monetary Policy Report and accompanying economic projections”.

As a result, the British pound took a slight hit from the disappointment, sending GBP/JPY further away from the 3-year high level of 156. With a lack of hawkishness from the BoE, it is unlikely that GBP/JPY will be breaking above the 156 handle from now until at least the next meeting in August. In the meantime, we can look forward to a short-term weakening of GBP/JPY.

Trade Setup for GBP/JPY (D1)

Sell Stop order at 153.300

Upcoming major news that may impact price movement of GBP/JPY

28 June – Bank of England member Haldance speaking at 2000 (GMT+8)

30 June – Bank of England member Haldance speaking at 1900 (GMT+8)

01 July – Bank of England Governor Bailey speaking at 1500 (GMT+8)

02 July – Bank of England Governor Bailey speaking at 0300 (GMT+8)