Market mood GBP/JPY: The JPY will find buyers if the second wave of COVID-19 keeps growing in pace [Video]
|Weak GBP, Strong JPY
The JPY will find buyers if the second wave of COVID-19 keeps growing in pace. Global cases now top 17 million after five of the last seven days saw one-day jumps of greater than 250,000 infections.
For the GBP there has still been very little progress made in Brexit talks as both the EU and the UK steel their positions ahead of final negotiations in the Autumn. The official deadline for a deal to be arranged is by year-end, but the end of October is the functional deadline to allow enough time for any deal to be implemented. This means that negotiations should start again in September. With expectations poor about a resolution rallies higher in the GBP should find sellers.
With time running out to arrange a deal the GBPJPY should find sellers if it manages to make its way up to 138.00 and the descending weekly trend line.
We expect this trade to play out between now and the next 4-6 weeks.
Trade Risks:
-
If we see a slowdown in infection rates across the world and a second wave is averted this will invalidate this outlook.
-
If we get positive Brexit news this will invalidate this outlook.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.