GBPJPY Closed at Profit – BOE Monetary Policy In Focus!
Arslan Butt • 2 min read
Our forex trading signal on Guppy went in line with the forecast to help us secure +60 Pips. I'm not comfortable taking a sell position as we have the Bank of England's (BOE) monetary policy meeting ahead. Let's break it down.
How Can the BOE Impact the Pound?
In our Forex Signals Brief for September 14th, my colleague Rowan elaborated on the BOE and our expectations. We are not expecting a rate hike, but the MPC Official Bank Rate Votes will be worth watching.
MPC Official Bank Rate Votes: The current expectation is 2-0-7. Here, the first number is how many MPC members voted to increase interest rates, the second number is how many members voted to decrease rates, and the third is how many members voted to hold rates.
Having said this, if the figure comes out as 3-0-6, it's going to spark the bullish trend in the Cable and Guppy. In addition, we also need to be ready for any surprises. Odds are very low, but we never know when central bankers change their minds like Bank of Canada did with its overnight rate.
GBPJPY: Technical Overview
The technical side has not changed much. The pair is consolidating below the Triple top resistance level of $146.65. We can't get a bullish trend until the market breaks above this triple top level. Is it possible today? Yup, it's quite possible on the hawkish monetary policy from the BOE.
GBPJPY – 4 Hour Chart – Triple Top Pattern
There is a contradiction between the price action and momentum indicators. Both the Stochastic and RSI are massively oversold and are holding below 10. Anyways, now the immediate support is at $145.65 (our previous take profit level). Breakage below this will lead the pair towards $144.95.
GBP/JPY – Trading Plan
It's better to wait for the BOE decision at 11:00 (GMT), however, I'm focusing on $146.45 to stay in sell below this level to target $145.65 and $144.95. Whereas, above $146.50, buying is preferred to target $147.