The Bank of England maintained the benchmark rate at 0.5% in line with expectations. The was no opposition vote (9-0), so the decision was made unanimously. The purpose of asset purchase was also maintained at GBP 435 billion. In the Monetary Policy Summary, BoE said, that Brexit remains the main challenge for the economy and the indicators for the fourth quarter are weaker than expected. In the context of interest rates, BoE believes that it is still too early to fully assess the impact of the November rise. A modest tightening is possible over the next few years, and possible hikes will be slow and gradual. The message has a slight dove interpretation, which translates into weakness in the British Pound.
Let’s now take a look at the GBP/JPY technical picture at the H4 time frame. After hitting the technical resistance at the level of 151.91, the Pound is losing ground after the BoE interest rate decision. The price dropped to the level of 151.15 in oversold market conditions. The next technical support is seen at the level of 150.44.
The material has been provided by InstaForex Company – www.instaforex.com
Source:: Global macro overview for 14/12/2017