- On Thursday the BoE will release its monetary policy report, and we expect a rate cut of 25bp to 0.25%
- There is also talk of more easing measures with an expansion of its asset purchasing program
- Our focus is the GBP/JPY
The GBP/JPY has retraced back to some important levels inside of a very new bullish structure which is still inside the post-Brexit vote range (129.80 / 142.20). The truth is, we are looking to sell.
The 135.50 zone is acting as support but the real buyzone should be around 133.35, which is a strong level recently tested. We are looking for a short-term move up so we can get a better price to short this curency pair. If we don’t get an opportunity to short it before Thursday we are goint to wait for the announcement and adapt, but a rally is expected.
The zone we are looking for short setups is the previous high volume zone around 138.75, and if the BoE announces a rate cut (like the market is anticipating) then we can expect a test of the 129.80 zone in the next week or so. This level was held by buyers after the Brexit drop in the pound.
For the time being we remain flat, but these are the levels we are looking at in the very near future.
GBP/JPY 4H Chart