GBP/JPY Slips Lower Despite Positive UK Inflation Rate – What’s Going On?
Arslan Butt • 1 min read
As you know, today one of the major highlighted economic events was the UK inflation rate. The Office for National Statistics reported a 1.9% headline rate of inflation on the year to February 2019, it’s better than the 1.8% in January 2019. Interestingly, all product groups contributed upward additions to output and input annual inflation. Despite that, the British Pound traded lower against its peer currencies.
On the other hand, Japanese Yen gained momentum ahead of the US Fed Fund Rate and FOMC Statement. The bullish trend in JPY is also supported after the Japan Cabinet Office released the Monthly Economic Report and revised down the assessment of production. The Japanese Cabinet Office continues to see the economy recovering moderately.
On the technical front, GBP/JPY is trading around 147.500, below a solid resistance level of 148. Zooming out on the 3-hour chart, GBP/JPY has formed a tweezers top pattern which typically causes a bearish reversal.
GBP/JPY has also formed a bearish engulfing candle. What’s more interesting is that the bearish engulfing candle is followed by a tweezer top.
Key Trading Level: 147.81
Here’s the thing – GBP/JPY can find immediate support around 147 and the below this, the pair is most likely to go for 146.250. We just opened a sell signal in GBP/JPY with a target of 147.21.