GBP/USD largely preserves the range from earlier this week as Bank of England (BoE) Governor Mark Carney refrains from speaking on monetary policy, with the pair at risk of facing choppy prices over the remainder of the year as market attention turns to phase two of the Brexit deal.

While the BoE will allow European banks to operate in the U.K. after Brexit, Governor Carney offered no insight for monetary policy as the central bank carries a wait-and-see approach into 2018. With limited data prints on tap for the remainder of the week, GBP/USD may continue to consolidate within a narrow range, but the broader outlook remains supportive as the BoE warns ‘further modest increases in Bank Rate would be warranted over the next few years, in order to return inflation sustainably to the target.’

In turn, GBP/USD may continue to track the upward trend from earlier this year, but the pair stands at risk for a larger pullback as it remains capped by the 1.3560 (50% expansion) region. Nevertheless, recent price action instills a constructive outlook for the pound-dollar exchange rate as both price and the Relative Strength Index (RSI) appear to be breaking out of the bearish formations from earlier this month. 

GBP/USD Daily Chart

USD/JPY appears to be on track to test the December-high (113.75) as the pair extends the bullish sequence from the previous week, with the Japanese Yen at risk of exhibiting a more bearish behavior over the remainder of the year should the Bank of Japan (BoJ) keep the door open to further support the real economy.