GBP/JPY on the up? 140.82 now in play on price charts

Justin Freeman

The British pound spent over a year in the forex market doldrums, not least because of the impact of Brexit on the currency.

However, since the coronavirus pandemic caused something of a realignment in the forex trading world, fortunes for the currency have changed.

This is also true for its pair with the Japanese yen, a currency that was traditionally perceived as a safe haven due to Japan’s status as one of the world’s major creditors.

A tentative pro-risk feeling has settled into the foreign exchange markets in recent weeks as many currency traders begin to see the light at the end of the lockdown tunnel.

For the pound, this has spelled good news.

Strategists are now suggesting that the pound could reach 140.82 in its pair with the yen, a move that would represent a surge.

This is expected to be likely if the pair can get above a so-called ‘swing high’ point, which it saw towards the end of Q2 2020.

If it gets above there, meanwhile, it could potentially reach 144.60.

Potential risks to the pair do exist, however.

Some analysts hinted that the 137.40 level could be on the cards if a downturn was to occur and then persist.

Looking to fundamental analysis, meanwhile, the Japanese yen is currently in something of a state of flux following the surprise resignation of the country’s Prime Minister, Shinzō Abe.

Abe declared towards the end of the week that he would vacate the office he has held for years.

His economic approach, nicknamed ‘Abenomics’, has been described as one of the reasons for Japan’s famously minuscule interest rates.

These currently rest at -0.1%, making Japan one of the world’s only major advanced economies to have a sub-zero interest rate.

Traders of the GBP/JPY pair may, then, decide to hold fire before making significant decisions about trading this pair – and instead wait and see how the Bank chooses to respond to the end of the Abe era.

Aside from that, some other key fundamental events are likely to arise in the next few days.

On Monday morning, housing starts information for Monday will be out at 5am GMT.

This metric will cover July and is predicted to show a year-on-year change from -12.8% to -13.7%.

In the evening in the GMT timezone, meanwhile, there will be an unemployment rate release for July.

This is due to show a rise from 2.8% to 3.1% when it comes out at 11:30pm GMT – suggesting that the country’s economic recovery from the coronavirus is far from sealed, especially in relation to the labour market.

Capital spending figures for Q2 2020 will also be out on Monday, though this time the release will be at 11:50pm GMT.

A rise from 0.1% to 4.3% is expected to occur.


Justin Freeman

Latest news

Contagion Warning From Crypto Markets Could Be A Buy Signal
One of the reasons the 2020 market crash was so severe and sudden was that overextended investors sold out of positions to liquidate funds, which drove prices down further, and created a need for further selling. Read more
Market Guru Cathie Wood is Buying These Stocks Right Now
With the Nasdaq 100 index currently trading 28% lower than its January highs, the Q1 correction has transformed into a multi-month rout. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2011 Global CFD & FX Broker
Number One Broker
BEST FOREX BROKER Visit broker
5
#2 BlackBull Markets LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#3 66% of retail CFD accounts lose money Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#4 Forex Broker eToro Logo67% of CFD traders lose Founded: 2007 Global CFD & FX Broker
Number One Broker
ALL-INCLUSIVE TRADING PLATFORM Visit broker
4.9
#5 Forex Broker Pepperstone LogoBetween 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9

    Forex Fraud Certified Brokers

    BDSwiss Logo
    ATFX Logo
    IC Markets Logo
    XM Logo
    AvaTrade logo
    Exness Small Logo
    Forex.com Logo
    Pepperstone Logo
    City Index Logo
    OctaFX Logo
    IQ Option Logo
    HYCM Logo
    skilling logo
    FXTM Logo
    BlackBull Markets Logo
    LegacyFX Small Logo
    Plus500 Small Logo