- BoE leaves policy rate unchanged at 0.75%.
- The bank says Brexit uncertainty has intensified.
- Risk-off mood helps the JPY stay strong.
After dropping to the 141.40 area earlier in the day, the GBP/JPY pair rebounded above the 142 handle before coming under pressure following the BoE’s policy announcements. As of writing, the pair, was trading at 141.57, losing 0.2% on a daily basis.
In a widely expected decision, the BoE left its policy unchanged at 0.75% following its December meeting. In its policy statement, the bank noted that Brexit uncertainties had intensified since the last meeting and reiterated that the policy action to Brexit would depend on the final outcome and that it could in either direction. “The appropriate path of monetary policy will depend on the balance of the effects on demand, supply and the exchange rate,” the bank explained.
On the other hand, the selling wave that hit major global equity indices following the Fed’s hawkish tone yesterday forced the pair to stay under a bearish pressure as traditional safe havens such as the JPY gathered strength against its rivals.
In the second half of the day, markets will be focused on Wall Street and another drop in the U.S. stocks could continue to drag the pair lower.
Technical levels to consider
The initial support for the pair aligns at 141.15 (Dec. 10 low) ahead of 140.65 (Aug. 21 low) and 140.00 (psychological level). On the upside, resistances are located at 142.10 (daily high), 142.50 (Dec. 19 high) and 143.20 (Dec. 17 high).
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