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  • The cross extends the drop and tests the 145.00 handle.
  • GBP weakness drags the cross to fresh multi-week lows.
  • BoE hikes rates by 25 bp. Carney sounded dovish at his presser.

The increasing selling pressure around the Sterling has dragged GBP/JPY to record fresh 5-week lows in the 145.00 neighbourhood.

GBP/JPY weaker post-BoE

The cross is down for the second consecutive session so far during the second half of the week, managing to find some grip around 145.00 the figure, or new multi-week lows.

The cross intensified the downside following higher rates at today’s BoE meeting. In addition, the central bank left unchanged its asset purchase facility and its purchases of corporate bonds at £435 billions and £10 billions, respectively.

However, BoE’s Governor M.Carney delivered a somewhat dovish message at his press conference today, noting that the country would be most vulnerable in an scenario of a trade war and its impact on confidence and investment.

Further out and still around Brexit, Carney said that higher rates (higher than now at least) should prevail in many of the expected Brexit outcomes.

GBP/JPY key levels

As the moment the cross is losing 0.89% at 145.35 facing the next support at 145.01 (low Aug.2) seconded by 143.76 (low Jun.28) and finally 143.21 (2018 May 29). On the other hand, a break above 146.87 (21-day SMA) would expose 147.17 (high Aug.1) and then 148.11 (100-day SMA).