London, England – Bank of England’s decision to surprise markets with a 15 basis points hike on Thursday, didn’t deter the FTSE 100 UK Index to jump 1.3% and closed at 7,261 points as investors digested the news. The decision came a day after inflation hit a decade high at 5.1% and producer price reached 13-year highs. Cable in response, jumped close to 1.3380 before pulling back to the 1.33 handle.
With the UK retail sales rising stronger than expected 1.4% m/m in Nov, well ahead of expectations (+0.8%) while October sales were revised higher (+1.1% from +0.8%) plus bullish forward guidance on inflation from BoE; our trade GBP/JPY reached all targets. We see further rebound to as far as ¥155 if the exchange rate closes above ¥151.30 on the weekly chart. The pair is pulling back at writing and any extended losses below ¥150 will negate this bullish scenario, however.
| HORIZON | STRATEGY | SL | TP1 | TP2 |
| Short-Term | Buy | 150.00 | 152.20 | 152.80 |
| Medium-Term | Buy | 150.00 | 152.80 | 153.50 |
| Long-Term | Buy | 150.00 | 153.50 | 154.50 |
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