Close Preview x  
     
Close x
Expert Advisor Hosting Request

Please provide the following information:
(All Fields Required)

X My Account Secure Account Login Login

Close x
Online Security

Secure login
Ensuring the security of your personal information is of paramount importance to us. When you sign in to the trading platform, your User ID and password are secure.

The moment you click Login, we encrypt your User ID and password using 128-bit Secure Sockets Layer (SSL) technology.

Browser security indicators
You may notice when you are on our website that some familiar indicators do not appear in your browser to confirm the entire page is secure. Those indicators include the small "lock" icon in the bottom right corner of the browser frame and the "s" in the Web address bar (for example, "https").

To provide the fastest access to the trading platforms, we have made signing in to trading platforms secure without making the entire page secure. Again, please be assured that your ID and password are secure.

Close x

We would like to contact you by telephone to help you make the most of your demo account, and inform you about our products and services. By submitting your telephone number you agree that FOREX.com can contact you by telephone.
Submit
 
Privacy policy
GBP/JPY underpinned by dovish BoJ, hawkish BoE

Updated  Jun 16, 2017 7:34:29 AM Written by Fawad Razaqzada



The Bank of Japan rounded off a busy week for central banks earlier today. It struck a more optimistic tone on the outlook for the Japanese economy as it kept its monetary policy unchanged. The bank upgraded its assessment of private consumption and overseas growth. Stronger growth overseas will benefit Japan because its economy is export-oriented. Significantly, however, the BoJ Governor Haruhiko Kuroda refused to be drawn into speculation about an early exit from its vast stimulus programmes. Mr Kuroda said: "There's some distance to achieving 2 percent inflation, so it's inappropriate to say now specifically how we will exit our ultra-loose monetary policy and how that could affect the BOJ's financial health. Laying out specific simulations now would only create confusion. We will debate an exit strategy only after 2 percent inflation is achieved and price growth stays there stably." Reading in between the lines, this was as dovish as one could have expected the BoJ to be. As a result, the yen, which had already weakened considerably yesterday, fell further today.

Elsewhere however the tide is turning as some of the major central banks are finally in the process of ending their extraordinary loose monetary policy stances. The Bank of England, for example, gave a strong hint yesterday that it may be about to raise interest rates as the “CPI overshoot may be bigger than previously thought.” Three MPC members actually voted for a rate increase, but were ultimately outnumbered by the five who decided, for now, to keep monetary policy unchanged. For how much longer will the BoE accommodate the rising UK inflation rates before it becomes a threat?

As a result of a not-so-dovish BoE and a not-so-hawkish BoJ, the pound could be set to gain further against the yen this year. In fact, this GBP/JPY has already ended its corrective trend that had started in early May, which means that the way has potentially been cleared for the move to begin. The Guppy’s break outside of the short-term downward channel could be significant given that the long-term trend appears to be bullish, as evidenced for example by the rising 50- and 200-day moving averages and also with price making higher lows. But after a sharp bounce over the past day and a half, the GBP/JPY may pullback to a key support level such as 140.90 before potentially resuming its upward trend in early next week. Some of short-term bullish targets could be the Fibonacci levels shown on the chart, with the 61.8% retracement at 144.50 being our near-term objective. But there’s potential for the rally to extend far beyond that level given the fundamental developments of this week. However, we would be quick to drop our bullish bias if we see a key reversal formation at higher levels or if the long-term bullish trend line breaks, whichever happens first. Until and unless that occurs, the path of least resistance is unambiguously to the upside now.

Source: eSignal and FOREX.com.

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FCA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan. Please read Characteristics and Risks of Standardized Options.

FOREX.COM TWEETS

Test your trading strategies risk free btn_demo_blue_hover.gif OR btn_open_an_account_dark_grey_alt_hover.gif

Have more questions?

Chat Live Now or call 0800 032 1948