Partner Center Find a Broker

Brexit related volatility and the upcoming BOJ monetary policy statement definitely makes this breakout move in Guppy one to watch as we start the new week.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12435.49 +0.13%
FTSE: 7690.68 +1.88%
S&P 500: 3019.82 -0.20%
DJIA: 27241.51 +0.18%
US 10-yr 2.06% +0.005
Bund 10-YR -0.395% -0.018
UK 10-YR: 0.646% -0.042
JPN 10-YR: -0.146% +0.008
Oil: 55.94 -0.46%
Gold: 1419.10 -0.01%
Bitcoin: 9513.50 +0.04%
Etherium: 208.80 -0.15%

Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • New Zealand building permits at 11:45 pm GMT
  • Bank of Japan monetary policy statement & press conference (tentative July 30)
  • Japan unemployment rate at 12:30 am GMT (July 30)
  • Japan industrial production at 12:30 pm GMT (July 30)
  • Australia building approvals at 2:30 am GMT (July 30)
  • German GFK Consumer sentiment at 7:00 am GMT (July 30)
  • Swiss KOF leading indicator at 8:00 am GMT (July 30)
  • German inflation at 1:00 pm GMT (July 30)
  • U.S. personal income & spending at 1:30 pm GMT (July 30)

What to Watch: GBP/JPY

GBP/JPY 1-Hour Forex Chart
GBP/JPY 1-Hour Forex Chart

Sterling traders were off to the races right out of the gate this week, pricing in the rising odds of a no-deal Brexit in October. Sterling fell across the board through the Asia and London trading sessions, but it seems like momentum has slowed for now. This currency should definitely stay at the top of the watchlist, and for today, we’ll pair it the Japanese yen that could see some movement with the latest monetary policy decision from the Bank of Japan coming soon. It’s likely we won’t see any fresh action on monetary policy from the BOJ as they are pretty divided on what to do next, but it is likely we’ll dovish commentary on global trade conditions and the low inflation conditions in Japan.

So, volatility in GBP/JPY should remain bid, and if you’re a bear the market is definitely on your side at the moment. But you may want to wait until the BOJ statement before hashing your trade plan as any dovish commentary from the BOJ may spark a rally in Guppy. If this is the case and the market retests the broken minor support area around 134.00, technical traders may start to hop in that area up to 135.00 to play the downtrend. If the BOJ is dovish but doesn’t enact new stimulus measures, resistance could form and the pair may return to the downtrend.

If you’re a bull on Guppy, it would likely take a statement from the EU that they are willing to re-open trade negotiations, and a very, very dovish BOJ (possibly an announcement of additional stimulus) to get any kind of  significant move higher worth looking at. If we see this scenario play out, it would likely lead to a very big move, and a break-and-hold above 135.00 would be the cue to start working on a long position idea.