Market mood GBP/JPY [Video]
|Listen to the latest market mood for the GBPJPY pair.
Strong JPY, Weak GBP
The UK is still awaiting a trade deal with the EU and recent rhetoric has shown that the two sides are still some way from an agreement. On July 02 EU’s Von Der Leyen says that the EU will have to prepare for other possible exit strategies on Brexit given that the EU and UK are still far apart. EU’s chief Brexit negotiator Barnier says serious divergences remain with the UK after 4 days of talks.
The JPY will stand to gain as a safe haven currency if the US COVID-19 caseload keeps increasing. US Daily COVID-19 cases increased to a record 55000 yesterday and top medical advisor Dr. Anthony Fauci warns the coronavirus may have mutated to become more infectious.
Therefore, expect GBPJPY sellers in the medium term. One key area for sellers will be the return to the descending daily trendline marked on the chart below where sellers can limit their risk.
Swing trade outlook – We expect this trade to play out over the next 1-2 weeks. However, the trade will remain valid for as long as its underlying factors remain valid.
Trade Risks
A fall in US COVID-19 cases will invalidate this outlook.
If we see progress between an EU and UK trade deal that will invalidate this outlook.
Further Positive vaccine news could also invalidate this outlook.
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