GBPJPY RISING HIGHER ON MORE BUYING PRESSURE
The British pound has fallen initially during the trading session on Tuesday, only to test the support level that we have been dealing with for several days now. Ultimately, this market continues to see a lot of back-and-forth, and that makes quite a bit of sense considering that people don’t know what to do with the economy. However, the interest rate differential continues to be a major driver of where we go, as the Bank of Japan has been working against the rising interest rates in its domestic bond market, therefore it’s been printing Japanese yen. This of course drives down the value of the yen, and it has been seen across the Forex world.
Looking at this chart, you can see that we are obviously very bullish, so there’s no reason to think that we should be shorting it any time soon. Yes, we may get some type of pullback occasionally, but that will be a nice buying opportunity, with the ¥170 level underneath being a significant support level just waiting to happen, and of course, there is a lot of psychology to that number.
I think continues to see a lot of buyers on dips and I would approach it as such. The ¥172.50 level is a major resistance barrier, and breaking above there could open up even more buying. At this point, it could send the pair toward the ¥175 level. The ¥175 level could be a barrier, if for no other reason than the psychology of the market.
Short-term pullbacks at this point should continue to see buyers enter the marketplace, as we have been in such a massive uptrend lately. The Japanese yen will continue to struggle due to the fact that the Bank of Japan is in the midst of quantitative easing, as they practice yield curve control in the 10-year JGB. Remember, Tokyo will continue to fight higher interest rates, with a ceiling of 50 basis points in that bond. In other words, they will step into the market and buy bonds to keep rates down. The only way they can do that is to print more yen, flooding the market with that currency.
On the other side of the equation, you have the Bank of England, which remains extraordinarily tight, and is fighting inflation. This sets up a bit of a perfect trade, as it is not only so momentum driven, but there is also a huge interest rate differential between the 2 currencies. Essentially, this is the old styled “carry trade,” perhaps on steroids. With this, I think that plenty of people will continue to step into this market and buy it every time it dips. If we can break above the ¥172.50 level, that is very likely that the market will go looking toward the ¥175 level over the longer term. Underneath, the ¥170 level should continue to offer plenty of support and would be thought of as the short term floor in the market. Because of this, a continued “buy on the dips” strategy will probably tend to work out better than anything else at this point. I would expect a lot of noise but at the end of the day, this is a bullish market for reason.
The ¥167.50 level underneath is significant support, and then of course the 50-Day EMA is racing toward that area as well. With that being the case, the market is likely to continue to see the upward pressure over, everything. Alternatively, the market then opens up the possibility of the pair being a one-way trade, just as we have seen for some time. The market continues to be a situation where we will find plenty of opportunities on pullbacks, and therefore if you are cautious and wait for value in the British pound, it’s very likely that you will have a trade set up rather quickly.
Looking at this chart, you can see that we are obviously very bullish, so there’s no reason to think that we should be shorting it any time soon. Yes, we may get some type of pullback occasionally, but that will be a nice buying opportunity, with the ¥170 level underneath being a significant support level just waiting to happen, and of course, there is a lot of psychology to that number.
I think continues to see a lot of buyers on dips and I would approach it as such. The ¥172.50 level is a major resistance barrier, and breaking above there could open up even more buying. At this point, it could send the pair toward the ¥175 level. The ¥175 level could be a barrier, if for no other reason than the psychology of the market.
Short-term pullbacks at this point should continue to see buyers enter the marketplace, as we have been in such a massive uptrend lately. The Japanese yen will continue to struggle due to the fact that the Bank of Japan is in the midst of quantitative easing, as they practice yield curve control in the 10-year JGB. Remember, Tokyo will continue to fight higher interest rates, with a ceiling of 50 basis points in that bond. In other words, they will step into the market and buy bonds to keep rates down. The only way they can do that is to print more yen, flooding the market with that currency.
On the other side of the equation, you have the Bank of England, which remains extraordinarily tight, and is fighting inflation. This sets up a bit of a perfect trade, as it is not only so momentum driven, but there is also a huge interest rate differential between the 2 currencies. Essentially, this is the old styled “carry trade,” perhaps on steroids. With this, I think that plenty of people will continue to step into this market and buy it every time it dips. If we can break above the ¥172.50 level, that is very likely that the market will go looking toward the ¥175 level over the longer term. Underneath, the ¥170 level should continue to offer plenty of support and would be thought of as the short term floor in the market. Because of this, a continued “buy on the dips” strategy will probably tend to work out better than anything else at this point. I would expect a lot of noise but at the end of the day, this is a bullish market for reason.
The ¥167.50 level underneath is significant support, and then of course the 50-Day EMA is racing toward that area as well. With that being the case, the market is likely to continue to see the upward pressure over, everything. Alternatively, the market then opens up the possibility of the pair being a one-way trade, just as we have seen for some time. The market continues to be a situation where we will find plenty of opportunities on pullbacks, and therefore if you are cautious and wait for value in the British pound, it’s very likely that you will have a trade set up rather quickly.
Comment:
Market UpDATES:
NASDQ100 US100 and Indices Sky Rocketing after FED pivot reates cooling
Nasdaq breaking 14055 easily as forecasted in my analysis : Next Target 14350
NVIDAI Sky ROCKETING(Watch als my other Forecasts USD/US100/USDJPY/GOLD/EURO- Related Markets)
Godl Found More Buyers on support.More Bullish Delat coming in nEXT TO 2000USD)
Medium-term price action on the daily chart exhibits scope to extend losses. The longer-term ascending channel is interesting (drawn from $1,641 and $1,959). Note that price action FAILED to touch gloves with the upper boundary in recent trading, pencilling in highs just ahead of the all-time high of $2,075.
Investment Sentiment rising higher from Lows:More Bulls
The Key Fed Inflation Rate Is Cooling At Pivotal Time For The S&P 500
EURO/USD Taking Profits +More Bulls Accumulation and Buying Pressure /Support 1,4075
NASDQ100 US100 and Indices Sky Rocketing after FED pivot reates cooling
Nasdaq breaking 14055 easily as forecasted in my analysis : Next Target 14350
NVIDAI Sky ROCKETING(Watch als my other Forecasts USD/US100/USDJPY/GOLD/EURO- Related Markets)
Godl Found More Buyers on support.More Bullish Delat coming in nEXT TO 2000USD)
Medium-term price action on the daily chart exhibits scope to extend losses. The longer-term ascending channel is interesting (drawn from $1,641 and $1,959). Note that price action FAILED to touch gloves with the upper boundary in recent trading, pencilling in highs just ahead of the all-time high of $2,075.
Investment Sentiment rising higher from Lows:More Bulls
The Key Fed Inflation Rate Is Cooling At Pivotal Time For The S&P 500
EURO/USD Taking Profits +More Bulls Accumulation and Buying Pressure /Support 1,4075
Comment:
GBP STILL LONG MORE BUYING PRESSURE
Comment:
Markets steady ahead of final push on the debt deal
After long weekends in many parts of the world, FX markets are returning to some progress on the US debt ceiling. President Joe Biden and House Speaker Kevin McCarthy have reached a two-year deal. That deal will be assessed by the House Rules Committee today and, if approved, will likely go to a vote in the House tomorrow. Both Democrat and Republican leaders feel they have the votes to get the deal through Congress – although at times like these, there may be a few holdout politicians who like their day in the sun.
After long weekends in many parts of the world, FX markets are returning to some progress on the US debt ceiling. President Joe Biden and House Speaker Kevin McCarthy have reached a two-year deal. That deal will be assessed by the House Rules Committee today and, if approved, will likely go to a vote in the House tomorrow. Both Democrat and Republican leaders feel they have the votes to get the deal through Congress – although at times like these, there may be a few holdout politicians who like their day in the sun.
Comment:
Here is an analysis of the positive and negative impacts of a weak and strong Japanese yen on various countries and regions:
Positive Impacts of Weak Japanese Yen:
Japanese Exports: A weak yen can boost Japanese exports by making them more price competitive in international markets. It makes Japanese goods relatively cheaper for foreign buyers, potentially increasing demand and stimulating export-oriented industries.
Tourism: A weak yen can attract more international tourists to Japan, as their foreign currencies can have greater purchasing power in the country. This can benefit the tourism industry and generate foreign exchange earnings.
Overseas Investments: A weak yen can encourage Japanese businesses and investors to seek opportunities abroad. It makes overseas investments relatively cheaper in terms of yen, potentially promoting outward foreign direct investment (FDI) and diversifying business activities.
Negative Impacts of Weak Japanese Yen:
Imported Inflation: A weak yen increases the cost of importing goods and raw materials, potentially leading to higher inflation. This can impact the purchasing power of Japanese consumers and erode their standard of living.
Energy Imports: Japan is heavily reliant on energy imports, particularly oil and natural gas. A weak yen increases the cost of energy imports, which can have adverse effects on energy-intensive industries and contribute to higher production costs.
Consumer Electronics: Japan is known for its consumer electronics industry. A weak yen can increase the cost of importing electronic components and materials, potentially affecting the competitiveness and profitability of Japanese electronic manufacturers.
Positive Impacts of Strong Japanese Yen:
Imported Goods: A strong yen makes imported goods relatively cheaper, benefiting Japanese consumers and potentially increasing their purchasing power.
Energy Costs: A strong yen reduces the cost of energy imports, which can benefit energy-intensive industries and help control production costs.
Travel and Education Abroad: A strong yen can make international travel and education abroad more affordable for Japanese citizens, potentially boosting outbound tourism and educational opportunities.
Negative Impacts of Strong Japanese Yen:
Japanese Exports: A strong yen can make Japanese exports relatively more expensive in international markets, potentially reducing their competitiveness and impacting export-oriented industries.
Tourism: A strong yen can make Japan relatively more expensive for international tourists, potentially affecting the tourism industry and reducing foreign exchange earnings.
Inflation and Deflation Concerns: A strong yen can exacerbate deflationary pressures in the Japanese economy, as it makes imported goods cheaper and can lead to lower domestic prices. This can hinder economic growth and pose challenges for policymakers.
It's important to note that the impact of currency strength or weakness on a country's economy can vary depending on various factors, including the country's economic structure, trade dynamics, fiscal policies, and global market conditions. The effects on specific countries or regions can also depend on their trade relationships, exchange rate policies, and economic interdependencies with Japan.
Positive Impacts of Weak Japanese Yen:
Japanese Exports: A weak yen can boost Japanese exports by making them more price competitive in international markets. It makes Japanese goods relatively cheaper for foreign buyers, potentially increasing demand and stimulating export-oriented industries.
Tourism: A weak yen can attract more international tourists to Japan, as their foreign currencies can have greater purchasing power in the country. This can benefit the tourism industry and generate foreign exchange earnings.
Overseas Investments: A weak yen can encourage Japanese businesses and investors to seek opportunities abroad. It makes overseas investments relatively cheaper in terms of yen, potentially promoting outward foreign direct investment (FDI) and diversifying business activities.
Negative Impacts of Weak Japanese Yen:
Imported Inflation: A weak yen increases the cost of importing goods and raw materials, potentially leading to higher inflation. This can impact the purchasing power of Japanese consumers and erode their standard of living.
Energy Imports: Japan is heavily reliant on energy imports, particularly oil and natural gas. A weak yen increases the cost of energy imports, which can have adverse effects on energy-intensive industries and contribute to higher production costs.
Consumer Electronics: Japan is known for its consumer electronics industry. A weak yen can increase the cost of importing electronic components and materials, potentially affecting the competitiveness and profitability of Japanese electronic manufacturers.
Positive Impacts of Strong Japanese Yen:
Imported Goods: A strong yen makes imported goods relatively cheaper, benefiting Japanese consumers and potentially increasing their purchasing power.
Energy Costs: A strong yen reduces the cost of energy imports, which can benefit energy-intensive industries and help control production costs.
Travel and Education Abroad: A strong yen can make international travel and education abroad more affordable for Japanese citizens, potentially boosting outbound tourism and educational opportunities.
Negative Impacts of Strong Japanese Yen:
Japanese Exports: A strong yen can make Japanese exports relatively more expensive in international markets, potentially reducing their competitiveness and impacting export-oriented industries.
Tourism: A strong yen can make Japan relatively more expensive for international tourists, potentially affecting the tourism industry and reducing foreign exchange earnings.
Inflation and Deflation Concerns: A strong yen can exacerbate deflationary pressures in the Japanese economy, as it makes imported goods cheaper and can lead to lower domestic prices. This can hinder economic growth and pose challenges for policymakers.
It's important to note that the impact of currency strength or weakness on a country's economy can vary depending on various factors, including the country's economic structure, trade dynamics, fiscal policies, and global market conditions. The effects on specific countries or regions can also depend on their trade relationships, exchange rate policies, and economic interdependencies with Japan.
Look also my NVIDIA Forecast Chart performed: Nailed it! Weak US DOllar also good for Tech Stocks, Bio Pharma and Tech have Highly positive correltions with Bitcoin and Ethereum, and vice versa. NVIDIA : Top Performer
Friday is the Big Day of the Week: aND IT WILL BE VERY BUISY. RGHT AFTER THE bELL PMI and Inflation DATA!