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13 Jun 2013
GBP/JPY faces southerly winds
FXstreet.com (London) - Despite what some might regard as an inflated pound, GBP/JPY continues to print lower lows this week and challenges the next support line and February highs.
GBP/JPY in corrective mode
Lee Hardman, Currency Analyst for The Bank of Tokyo-Mitsubishi UFJ, Ltd explains that the foreign exchange market remains in corrective mode with the yen is continuing to reverse sharp losses sustained between November and May. He explains that the turning point proved to be Fed Chairman Bernanke’s testimony on the 22nd May when he signalled that the Fed could begin to taper QE at upcoming meetings. “The policy signal has triggered a sharp position adjustment in the foreign exchange market and the unwinding of carry positions is hitting high yielding currencies hard such as the Aussie and kiwi, while low yielding funding currencies of the yen, euro, pound, and Swiss franc are benefitting”. With there being little on the calendar today for the pound, the pair are likely to react to the US data anticipated in the afternoon through risk playing out in USD/JPY. The focus will be retail sales, but there will be the usual initial jobless claims. For retail sales, Annette Beacher, head for Asia Research at TD Securities said that they are expecting to see further improvement in May, with sales advancing by +0.4% M/M (in line with consensus) due to warmer weather and strong auto sales. TD expects 340k (mkt 346k) for initial claims.
GBP/JPY looks a bearish play
GBP/JPY are indicating bearish signals, trading below pivot with ma’s encouraging offers until 140.37 EMA50 which could mirror Aprils spike on the way back down. The pair are supported by the Feb highs until the March highs 144.90 / 146.00. A rebound might be expected here on oversold indexes with some consolidation before the continuation of the correction plays on.
GBP/JPY in corrective mode
Lee Hardman, Currency Analyst for The Bank of Tokyo-Mitsubishi UFJ, Ltd explains that the foreign exchange market remains in corrective mode with the yen is continuing to reverse sharp losses sustained between November and May. He explains that the turning point proved to be Fed Chairman Bernanke’s testimony on the 22nd May when he signalled that the Fed could begin to taper QE at upcoming meetings. “The policy signal has triggered a sharp position adjustment in the foreign exchange market and the unwinding of carry positions is hitting high yielding currencies hard such as the Aussie and kiwi, while low yielding funding currencies of the yen, euro, pound, and Swiss franc are benefitting”. With there being little on the calendar today for the pound, the pair are likely to react to the US data anticipated in the afternoon through risk playing out in USD/JPY. The focus will be retail sales, but there will be the usual initial jobless claims. For retail sales, Annette Beacher, head for Asia Research at TD Securities said that they are expecting to see further improvement in May, with sales advancing by +0.4% M/M (in line with consensus) due to warmer weather and strong auto sales. TD expects 340k (mkt 346k) for initial claims.
GBP/JPY looks a bearish play
GBP/JPY are indicating bearish signals, trading below pivot with ma’s encouraging offers until 140.37 EMA50 which could mirror Aprils spike on the way back down. The pair are supported by the Feb highs until the March highs 144.90 / 146.00. A rebound might be expected here on oversold indexes with some consolidation before the continuation of the correction plays on.