GBP/JPY – flat lined around hourly 50-MA

GBP/JPY cross is trading in the sideways manner around hourly 50-MA located at 130.40 levels amid gains in the Asian equities and FTSE futures.

BOE looms

The main event for GBP pairs this week is the Bank of England rate decision. Governor Carney, a lone steady hand amid political chaos, has indicated readiness to cut rates/do more QE this summer.

Markets expect the BOE to strongly indicate more easing this week. A significant majority also believes the bank could cut rates this week itself. The rate decision is due this Thursday. Heading into the event, the GBP/JPY cross will be at the mercy of the overall demand for the US dollars and action in the equity markets.

GBP/JPY Technical Levels

Acceptance above hourly 50-MA of 130.40 would open doors for a test of 131.07 (hourly 100-MA). A violation there would expose 131.95 (hourly chart resistance). On the other hand, a breakdown of psychological support at 130.00 would expose 128.60 (July 5 low), under which losses could be extended to 126.73 (May 2010 low).