HomeContributorsFundamental AnalysisInstrument of the Week (June 10—14): GBPJPY Insight

Instrument of the Week (June 10—14): GBPJPY Insight

The GBPJPY pair reflects the exchange rate between the British Pound and the Japanese Yen, influenced by the economic conditions and monetary policies in the United Kingdom and Japan. The British Pound is affected by UK economic indicators, political events, and the Bank of England decisions. On the other hand, the Japanese Yen is impacted by the health of Japan’s economy, global risk sentiment, and the monetary policies of the Bank of Japan. This currency pair is known for its volatility, making it attractive for traders interested in the dynamic interplay between these two major economies.

Japan gross domestic product (GDP) QoQ, June 10, 01:50 (GMT+2)

The forecast for Japan’s GDP indicates a contraction of -0.5% this quarter, down from the previous growth of 0.1%. If the GDP drops more severely than the expected -0.5%, it would suggest a worsening economic situation in Japan. This will potentially drive investors toward safer assets and weaken the Yen against the Pound, thus increasing the GBPJPY rate. Conversely, if the GDP shows a reduction that is less than expected or unexpectedly grows, it would enhance investor confidence in the Japanese economy, strengthening the Yen and potentially decreasing the GBPJPY rate as the Yen appreciates.

UK gross domestic product (GDP) MoM, June 12, 08:00 (GMT+2)

The forecast for the UK’s monthly GDP is an increase of 0.2%, signaling a slowdown from the previous month’s growth of 0.4%. Meeting or surpassing this forecast could reinforce the positive outlook on the UK’s economic resilience, thereby supporting the Pound’s strength and potentially pushing the GBPJPY rate up. Conversely, if GDP growth is less than expected, suggesting economic stagnation or a downturn, it could weaken the Pound due to fading investor confidence. This weaker stance would likely push the GBPJPY rate downward as market participants might shift their investments towards safer or more stable currencies, including the Yen.

In the daily timeframe, GBPJPY, in a long-term bullish trend, has formed an upward channel and reached an important resistance area. The market has strong bullish sentiments, and many indicators show further upside opportunities.

  • If the bulls push the price above the 200,000 resistance, GBPJPY will reach 206,000, which corresponds to 161.8 Fibonacci;
  • However, if the price bounces off the resistance, it could correct to 197.000 and then start rising to 206.000.

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