• The British Pound´s weakness goes on as the Bank of England offers a dovish outlook for both inflation and rates.
• The Bank of England dovish comments made investor wonder if the next rate hike is coming in November.

The GBP/JPY is trading at around 147.89 down 0.53% on Thursday.

Earlier in the European session, the GBP/JPY lost about 100 pips on the back of dovish comments by the Bank of England (BoE). In the American session, the weakness persisted until the cross found an intraday low at 147.50. 

The BoE left its target rate for overnight deposits with commercial banks on hold as expected but said that inflation is falling faster than forecasted and drivers are moving from external to domestic factors. The BoE sees the disappointing Gross Domestic Product (GDP) reading in the first quarter as mainly due to adverse weather conditions. The Bank delivered a dovish outlook for both inflation and growth. Interestingly, “market pricing suggests that expectations of the next hike have moved from August to November.” according to Rabobank analysts 

GBP/JPY 4-hour chart 

The medium-term trend is bearish and the market is trading below the 50, 100 and 200-period simple moving averages (4hour chart) suggesting a strong downward momentum. Immediate support is seen at the 147.50 intraday low followed by the 147.00 swing low and figure. To the upside, the bulls will likely find an immediate resistance at the 148.00 handle followed by the 148.55 supply level and the 149.00 handle.