We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • monthly $SPX chart downright disgusting, little over one day left for candle completion. This is an area to be careful with LT techs. So much fundamental fuel behind this + a March FOMC rate decision. Some type of emergency move (or warning of such) looking more and more likely https://t.co/OPEAj7Zyp6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.94%, while traders in USD/CAD are at opposite extremes with 70.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ODVocTrdav
  • weekly $USD chart not very encouraging for dollar bulls. Not yet complete evening star + resistance from prior support trendline. no bueno https://t.co/EdVeJhD2As
  • this article is from Tuesday. Both the long and short $USD options have played through with $USDCAD and $EURUSD breakouts. Meanwhile, $USD down the drain, still in bull flag, for now https://t.co/nvk4X6LH79 https://t.co/EN0K4HRyQB
  • $USDCAD breaks out, fresh four-month-highs. Currently caught at the October swing high. https://t.co/GOa280Q75D
  • $EURUSD next resistance out. 1.1000 are looms large. Big support last year, hasn't yet seen much of a resistance test https://t.co/lE3eEjJ6dy
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/heURFpRLcY
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Silver: 0.56% Gold: 0.36% Oil - US Crude: -1.99% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/XM6m0QSNUs
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.58% 🇪🇺EUR: 0.54% 🇳🇿NZD: 0.45% 🇯🇵JPY: 0.31% 🇨🇦CAD: -0.02% 🇬🇧GBP: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/gV6RKUgVti
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Wall Street: -1.19% US 500: -1.21% France 40: -2.41% Germany 30: -2.59% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/NJCKfaH5f1
GBP/JPY Range Looks to U.K. Fundamentals for Direction

GBP/JPY Range Looks to U.K. Fundamentals for Direction

2010-07-16 17:35:00
John Rivera, Currency Analyst
Share:

The pound’s three day rally against the yen ended as the pair violently reversed on the back of a broader flight to safety. A sharp fall in U.S. consumer confidence fueled building risk aversion leading to across the board yen gains. Improving British fundamentals and signs that the European debt crisis may be in the rearview mirror had been generating sterling support. Indeed, the number of British workers claiming government jobless benefits declined for the fifth consecutive month in June adding to the case for sustainable growth despite new austerity measures. Meanwhile, successful bond auctions from Greece and Spain proved they have the ability to raise funds on their own easing concerns that the debt crisis will become a broader contagion spreading to the U.K. Nevertheless, the agreement for a double dip global recession has started to gather steam and could limit any bullish sentiment for the pair. Yet, strong corporate earnings and a clean bill of health for the European banking system following the stress test could restore sterling support keeping the current range intact.

Levels to Watch:
-Range Top: 136.00 (Range, Pivot)
-Range Bottom: 131.00 (Range, Pivot)

RANGE-10-07-16-01

Suggested Strategy

Long: Place an entry at 131.00-Range Bottom
Stop: Set the stop to 130.00-100 pips in risk
Target: The first target is 20-Day SMA at 133.75

Trading Tip – Although we have defined the lower bound of the range at 131.00 we can’t discount the 132.00 handle as a potential pivot level as the pair has failed to close below it since May 28th. If that is the case again today, a long opportunity may come ahead of our entry. Given the conviction of recent bearish sentiment we still favor our original target, but will remain cautious given the broader trend as potential exists for a break from the range. The European bank stress test results will be revealed on July 23rd and could potentially have a significant impact on sterling direction and the broader market. Therefore, those not already in positions may want to sit on the sidelines until the post release volatility settles to gauge future direction. The level of event risk on tap from U.K. fundamentals and corporate earnings could see the range deliver several opportunities to profit if the lead to shifts in sentiment.

Event Risk for U.K. and Japan

U.K.– The upcoming economic calendar is full of event risk for the pound starting with the Public sector net borrowing report which is expected to show the deficit in June was 13 billion compared to May’s 16 billion. A shrinking deficit may raise the outlook for a rate hike with inflation above the central bank’s 3.0% threshold. The release of the minutes from the MPC’s last meeting could add to an improved outlook for yields if there was a break of ranks with members voting for tightening to begin. The June retail sales report and the reading for second quarter GDP are forecasted to show sustained domestic demand and growth which would continue the theme of strong U.K. fundamentals and could restore bullish sterling sentiment.

Japan – The all industry activity report for May is the only Japanese fundamental release with any market moving potential. The broader measure of the economy could reinforce the BoJ’s improved outlook for growth which could generate short-term yen support. Otherwise, look for broader trends to dictate the Asian currency’s price action with the corporate earnings calendar presenting significant event risk.

RANGE-10-07-16-02

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.