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GBP/JPY – break of trend line support

FXstreet.com (London) - GBP/JPY had begun to slow in the asedning chanel set in April, and now breaks the support line with UK CPI coming in lower than market consensus, while Boj left rates unchanged.

The surprisingly weak UK inflation data came in as 2.4%y/y vs. 2.6% expected while BoJ left policy unchanged in their policy meeting with a target interest rate at 0.00 – 0.10% and the Monetary Base Target as ¥270 trillion. The pair is currently trading 100 pips down on yesterday’s European session, and it has broken the trend line supporting of the ascending channel, which may lead to a retest of support from the figure, 155.00 and 154.75 area. Resistances are 156.00 and 156.75.

On the economic calendar, there is a main focus likely to be the minutes from the 9 May BoE rate decision for the pair. However, the market is also looking out for FOMC minutes in the evening, which will effect the cross while we also have Bernanke speaking on ‘The Economic Outlook’. Close attention will be paid to his testimony to the Joint Economic Committee of Congress. The market has been latching onto strong language in tapering of the QE programme after a series of improved economic data in the US, although the bears feel the road map for exiting the programme is still a long one and that language came too soon.

EU: Current Account n.s.a (Mar): €24.8B; Current Account s.a: €25.9B

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