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GBP/JPY Slips Lower Despite Positive UK Inflation Rate – What’s Going On?

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.

Support Resistance
147.55 148.07
147.29 148.32
146.77 148.84
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.

Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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