News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
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
Gold
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
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Technology stocks continue to be a source of weakness for US equities, undermining risk appetite. Meanwhile, US-China tensions simmer beneath the surface creating uncertainty. Get your #equities update from @PeterHanksFX here: https://t.co/yH8oTwT3iW https://t.co/tvfrXThyaC
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/Xi9QU3ADPF
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/cQwbeZ6Feq
  • #Oil prices saw a reprieve to the recent selling pressure but remain at risk while below downtrend resistance. Here are the levels that matter on the #WTI technical chart. Get your #commodities update from @MBForex here: https://t.co/CcXsF3JCMH https://t.co/RUmS1cX52v
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/boEI8RuQdC
  • The growth-linked New Zealand Dollar may rise on the upcoming #RBNZ rate decision following rosy economic data. However, downside potential in the S&P 500 could offset $NZDUSD gains. Get your #currencies update from @ddubrovskyFX here: https://t.co/LfCe6C6G3P https://t.co/kUeBxxeaEf
  • It was a quiet week in Aussie as $AUDUSD put in its second consecutive week of indecision. But taking a more granular look highlights the potential for a reversal scenario. Get your #currencies update from @JStanleyFX here: https://t.co/PPK20nubAf https://t.co/0nfmRRFNnz
  • The S&P 500 pushed the market's comfort with a head-and-shoulders pattern through Friday's close. What should we look for in technical patterns, overlapping fundamental tides and speculative positioning for the likes of $EURUSD next week? https://www.dailyfx.com/forex/video/daily_news_report/2020/09/19/EURUSD-Pressure-Building-while-Anxious-Traders-Weigh-Did-SP-500-Break.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/lgVJVwi8th
  • Sterling remains trapped by overarching fundamentals drivers and both $GBPUSD and $EURGBP are going to have to wait until the Brexit dust settles. Get your #currencies update from @nickcawley1 here: https://t.co/vF1K1cy0nd https://t.co/NSA7qiQihc
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/d9EmTOHyTv
GBP JPY Weakness Nears Important Technical Support

GBP JPY Weakness Nears Important Technical Support

2018-02-14 10:00:00
Nick Cawley, Strategist
Share:

Sterling Talking Points

- JPY continues to rally despite a slowing economy.

- GBP weakness is firmly pinned on Brexit negotiations.

Check out our new Trading Guides: they’re free and have been updated for the first quarter of 2018.

GBPJPY Not Listening to Central Bank Commentary.

Both Sterling and the Japanese Yen are refusing to listen to their respective central banks, causing the pair to move lower. In the case of GBP, the Bank of England (BoE) recently signaled that UK interest rates are going to move higher this year and probably at a quicker pace than previously expected. Market expectations are now for the BoE to raise interest rates by 0.25% in May and November this year with a possible third hike in Q1 2019.

Brexit negotiations however continue to drive Sterling at the current juncture and may continue to weigh on the currency ahead of important speeches by the UK’s Ministers for Brexit and the EU Council Summit meeting on March 22-23.

In Japan, the economy continues to grow but at a slower pace than expected with headline Q4 GDP up 0.5% against expectations of a 1.0% print. However inflation remains firmly below the BoJ’s target and is currently running at 1% compared to the central bank’s stated aim of around 2%. Lack luster growth and below target inflation will keep monetary policy loose for some time in Japan and push the currency lower.

Our Q1 JPY forecast can be downloaded here and the Weekly JPY Currency Forecast can be accessed here.

Technical Support Levels in View

The latest GBPJPY chart shows the pair moving towards a cluster of supporting candles around 148.000 an area that also contains the 50%Fibonacci retracement level of the August 2017 – February 2018 move at 147.965. The stochastic indicator is also showing the pair in oversold territory suggesting that a reversal of the current move may be on the cards in the short-term. A break higher targets 150.000 ahead of the 100-day EMA at 151.120.

GBPJPY Price Chart Daily Timeframe (August 2017 – February 14, 2018)

GBP JPY Weakness Nears Important Technical Support

Chart by IG

Clients Net-Long of GBPJPY

IG Client Positioning data show 55.0% of traders are net-long GBPJPY with the ratio of traders long to short at 1.22 to 1. The number of traders net-long is 35.9% higher than yesterday and 42.7% higher from last week, while the number of traders net-short is 17.1% lower than yesterday and 11.0% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPJPY-bearish contrarian trading bias.

The Traits of Successful Traders and how to find the Number One Mistake Traders Make are just two of the topics covered in ourFree Trading Guides.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

DISCLOSURES