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  • The Sterling comes out of the gate on the defensive as Brexit returns to the forefront.
  • The early week sees a thin calendar for both the Pound and the Yen, leaving the pair exposed to broader market sentiment.

The GBP/JPY paring is trading into recent bottoms, kicking around near 144.65 as the new trading week opens up.

The Sterling has declined against the safe-haven Yen for three straight trading weeks as Brexit concerns continue to dominate headlines for the GBP and last week’s showing from the Bank of England (BoE) revealed to broader markets a pace of rate hikes that is markedly slower than many had prepared for, with the BoE looking at making interest rate increases at a pace of once a year looking out over the next several years, deflating what little bullish hopes remained built into the already-weakened British Pound.

After last week’s blockbuster BoE rate call, this week is looking notably more sedate for the GBP on the economic calendar, though traders will be looking towards Friday’s UK GDP showing, with Q2 GDP figures, as well as the UK’s new monthly GDP indicator, dropping on markets early in the day, with median expectations bracing for a q/q slump to 0.1% after the last period’s 0.2% showing, while the monthly indicator last came in at 0.3%.

GBP/JPY levels to watch

With the GBP/JPY already breaking out of the low end of July’s lows near 145.20, bulls will be hoping to halt the slide before reaching swing lows near the 144.00 major level, while bears will hoping to push off from resistance at August’s early high near 147.15 to make further headway into a new low for 2018.