GBP/JPY – BoE May Start “Talking About Talking About” Rate Hike

#OPINIONLEADER# #Signal#

 SEP 13, 2021

• Rate hike consideration conditions met, says 4 out of 8 BoE committee members
• Straddle setup in GBP/JPY (D1)

Chart 1: GBP/JPY D1 chart

The Bank of England (BoE) monetary policy report hearing last Wednesday provided some insights into the August monetary policy meeting. The central bank’s governor Andrew Bailey highlighted that 4 out of 8 committee members (including Bailey himself) felt that the minimum criteria for the BoE to consider an increase in interest rate had been met. Despite so, those four members do not think that those criteria are sufficient to justify a rate hike at the moment due to the uncertainty caused by the COVID Delta variant.

GBP/JPY has been trading within a 140pips range since the start of September. At the moment, a Straddle pattern is being formed due to no clear direction. With the upcoming series of UK data releases and monetary policy announcements, there may be trading opportunities in either direction if GBP/JPY were to break out of that 140pips range.

Trade Setup for GBP/JPY (D1)

Buy Stop at 153.20

Sell Stop at 150.80

Upcoming major news that may impact price movement of GBP/JPY

14 September – UK employment data release at 1400 (GMT+8)

15 September – UK CPI y/y data release at 1400 (GMT+8)

17 September – UK Retail Sales m/m data release at 1400 (GMT+8)

17 September – Bank of England Consumer Inflation Expectation data release at 1630 (GMT+8)

22 September – Bank of Japan monetary policy announcement at a tentative timing

22 September – UK Flash PMI data release at 1630 (GMT+8)

23 September – Bank of England monetary policy announcement at 1900 (GMT+8)