Pound sterling falters as central bank struck dovish tone.
“BoE dovish tilt continues to weigh upon pound sterling.”
Bear market continued their agenda upon pound sterling despite recent rate hike from Bank of England last week. During the latest policy meeting, BoE maintained their forward guidance, deeming further policy tightening remains a “possibility”. However, the central bank cut its medium-term inflation forecasts due to ongoing risk and hurdles in the global market. BoE expects economic contraction of 0.25% in 2023 while inflation rate is expected to depreciate towards 1.3%. The forecast diminishes possibility for more rate hikes in the future, dimming market sentiment towards their currency.
Quick recap on GBPJPY
The pair falters, trimming off its previous spike as bulls run diminishes, overtaken by persistent bears.
GBPJPY Weekly Technical Analysis
GBPJPY reverses its prior gains after touching 168 briefly, emphasizing strong selling pressure defending the psychological level.
GBPJPY Daily Technical Analysis
From daily chart, we could observe the formation of head and shoulders pattern, while currently testing around the neckline of 159.67.
ORDER: SELL STOP
STOP LOSS: 161.50
Target 1: 157.25
Target 2: 155.50
ZFX Analyst’s Comment
The pair has a significant room for further downside when referring to the weekly chart. However, as bearish momentum remains “soft”, we may expect the pair to experience short-term correction before extending its main trend after a meaningful close below 159.67.
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