Is the GBP/JPY pair on course for 137 on the price charts?

Justin Freeman

The GBP/JPY pair is, overall, looking positive – but traders will need to keep a close eye on both technical and fundamental trends over the next few days.

The exchange rate for the pair is currently hovering around the 136 level, though the overall trend is in favour of the pound’s rise.

The present support level, which sits at around 135, appears to be having the effect of coaxing traders away from selling off the currency.

According to some strategists, this could bring the 137 level into play.

If this happens, it could be significant.

In this pair, the 137 point is deemed important on a psychological level.

It would also be considered important on a deeper level.

It would mean that the all-important 200-day simple moving average, which currently rests at 136.90, would have been breached.

However, analysts also warned that broader rises are likely to end up contained.

The Relative Strength Index for the pair, which measures how overbought a pair might be, has gone below a level designated as its neutral midpoint.

The same thing has happened with another indicator, the moving average convergence/divergence tracker.

As a result, analysts are now close to ruling out the chance that the pair will return to levels north of 142 – even though 142.71 was its best performance so far in September.

In terms of fundamental developments, meanwhile, there are two major events on the horizon.

One is the election of a new Japanese Prime Minister.

Yoshihide Suga was made the leader of the country’s incumbent Liberal Democratic Party on Monday, paving the way for him to become Prime Minister later in the week.

The effects of this on the foreign exchange markets, however, are expected to be low.

Suga is expected to take roughly the same line as the outgoing Prime Minister, Shinzō Abe – meaning that traders are not expected to have to face much political instability.

The other big event on the economic calendar in Japan is a meeting of the Bank of Japan, which is the major East Asian economy’s central bank.

This is due to take place on Thursday.

However, it is widely expected that there will be no change to the current monetary policy landscape.

Some other relevant events are scheduled in on the economic calendar for this week.

Tuesday, for example, will see some figures on Japan’s merchandise trade balance released.

These figures will cover the month of August, and are due out at 11:50pm GMT.

Separate figures for imports and exports will also be released in the same timeframe.

On Thursday, there will be a national consumer price index release for August out at 11:30pm GMT.

This is due to show a year-on-year rise from its previous position of 0.3%.

It is due to go up to 0.6%.

Justin Freeman

Latest news

Crude Oil Daily – Uptrend in progress
The Crude oil market, on the D1 time frame, was in a short downtrend until the 2nd of November when a lower bottom was reached at 33. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2012 Global CFD and FX broker
Number One Broker
Best FOREX BROKER Visit broker
#2 Your capital is at risk Founded: 2012 Global Forex Broker
Number One Broker
Best Trading App Visit broker
#3 Forex Broker Pepperstone LogoYour capital is at risk Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
#4 Your capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
#5 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker

    Forex Fraud Certified Brokers

    Plus500 Small Logo
    OctaFX Logo
    ATFX Logo
    Oanda Small Logo Logo
    BlackBull Markets Small Logo
    LegacyFX Small Logo
    HYCM Logo
    Exness Small Logo
    XM Logo
    skilling logo
    City Index Logo
    FXTM Logo
    IQ Option Logo