GBP/JPY testing key hourly resistance, blue skies above 134.70s
- GBP/JPY is taking resistance with stops eyed above, guarding risk to next milestone.
- Brexit and coronavirus risks never too far away to dampen the conviction.
GBP/JPY is currently trading at 134.54 between a low of 133.97 and 134.55, on the bid and adding some 0.27% at the time of writing.
The yen crosses are bid in Asia and the currency is weakening against the dollar.
There is little rhyme nor reason to the move in the Japanese currency, for the trajectory is in stark contrast to the weekend headlines pertaining to the spread of the coronavirus internationally.
More on that here:
As for the nation's own issues, there are addressed in here while the nations seek to relax lockdown measures: Japanese Economy Minister Nishimura: To consult with experts on relaxing restrictions on July 10
Meanwhile, the UK-EU trade negotiations have been showing a little progress.
Markets are hoping for a breakthrough this week, but there is very little sign that there can be much in the way of significant progress in order to alleviate some of the pressures on the pound.
Traders will be looking to the summer economic update from Chancellor Rishi Sunak this week, but tax cuts are not likely.
What markets will be on the lookout for the measures to help cushion the rise in coronavirus unemployment.
The govt has said it will not extend the furlough programme past October, but it may introduce measures to encourage hiring young people in particular. On taxes, there may be targeted VAT cuts, but no sweeping cuts overall,
analysts at TD Securities explained.
‘Not out of the woods yet’
Meanwhile, the long-anticipated re-opening of England’s hospitality sector and other service-related businesses on July 4 has boosted some optimism among the public, but it was accompanied by a somber warning from PM Johnson that the country is ‘not out of the woods yet’.
His remarks are aimed at taming the public’s behaviours in view of the ongoing pandemic.
The re-opening should help staunch the wounds of hundreds of businesses. However, the results of several recently published surveys on the UK economy provide grim reading.
GBP/JPY levels
A break of 134/70 recent highs opens risk to the 136.20s. MACD is positive and price is above the 21-hour moving average.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
