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GBP/JPY Poised to Challenge the 2014-High

In May, GBP/JPY consolidated, and was slightly bearish as you can see in the 4H chart.

(gbpjpy 4h chart, 6/15)

In June, it broke above May's falling trendline, retreated from 172.50 to 171, then found support and extended higher. The confirmation rally following the initial breakout developed on the back of a hawkish sounding governor of the Bank of England (BoE), Mark Carney, who said the bank might raise rates earlier than the market expected.

The general outlook from the markets has been around mid 2015, so now this projection has shifted to Q1 2015. 

(gbpjpy daily chart, 6/15)

With Carney sounding hawkish, traders are bullish on GBP, and the gbp-yen is poised to test the 173.64 and then 174.83 highs. A pullback at this point should have a bearish outlook limited to 172 in the case the market is ramping up for a breakout. Below 171, the market would likely be retaining the consolidation mode it has been throughout 2014.