- The US-China trade tension keeps the GBP/JPY down amid lack of major drivers from the rest of the globe.
- UK politics remain almost silent amid no major data/events but challenges to the PM Johnson prevail.
Although fears of the global recession keep exerting downside pressure on the GBP/JPY pair, absence of major catalyst from the UK and Bank of Japan’s (BOJ) favor for easy money guard the declines as the quote seesaws near 128.80 during Thursday morning in Asia.
While China’s Yuan depreciation has recently added fuel into already boiling concerns for a trade war between the world’s largest economies, the Trump administration’s order barring the government departments from purchasing products of the Chinese companies including Huawei becomes the latest salvo in the hot issue.
Considering the brighter of a full-fledged trade war to drag the global economy into recession, central banks from New Zealand and India announced big rate cuts to safeguard their domestic systems from perils of such a threat on Wednesday.
As a result, the Japanese Yen (JPY) continues to hold its market favorite status, mainly due to its safe-haven allure. However, BOJ’s favor of ultra-loose monetary policy and the latest soft data concerning Japanese Trade Balance and Current Account limit the quote’s south-run.
On the other hand, UK Prime Minister (PM) Boris Johnson is likely to witness a no-confidence vote as soon as the Parliament resumes in early September after the summer recess. Some among the Tory rebels are also plotting to push the Queen to sack PM Johnson if he refrains from respecting the vote.
Amid lack of data from Britain and Japan, investors will keep an eye over trade/political issues to determine near-term market direction.
Technical Analysis
The present month low near 128.10, followed by 128.00 round-figure, becomes the key support to watch while buyers will wait for a sustained break beyond 130.10, including current week high, for a fresh upside towards July 30 low of 131.61.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.