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GBPJPY Fundamental Analysis – January 21st 2020

FX:GBPJPY   British Pound / Japanese Yen
Forex traders are eagerly awaiting UK employment data, where average weekly earnings are predicted to keep inflationary pressures elevated and the Bank of England sidelined. A solid headline growth figure of 110K is expected. Volatility in the British Pound increased together with selling pressure following commentary regarding the trading relationship between the EU and the UK following the transition period. How will today’s economic data impact price action in the GBPJPY? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.

The Bank of Japan decided to keep its key interest rate unchanged together with the 10-Year Yield Target, as expected by markets. The central bank noted that inflationary pressures are easing, and left the door open for future interest rate cuts deeper into negative territory. Risk-verse investors keep demand for the Japanese Yen healthy, especially after yesterday’s dim global economic outlook by the IMF. Where is the GBPJPY headed to next? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.

KEY FUNDAMENTAL FACTORS FOR THE GBPJPY
Here are the key factors to keep in mind today for British Pound trades:

UK Jobless Claims Change and Claimant Count Rate: The UK Jobless Claims Change for December is predicted at 22.6K, and the Claimant Count Rate is predicted at 3.5%. Forex traders can compare this to the UK Jobless Claims Change for November, which was reported at 28.8K and to the Claimant Count Rate, which was reported at 3.5%.
UK Employment Change, ILO Unemployment Rate, and Average Weekly Earnings: The UK Employment Change for the tri-monthly period ending in November is predicted at 110K, and the ILO Unemployment Rate is predicted at 3.8%. Forex traders can compare this to the UK Employment Change for October, which was reported at 24K and to the ILO Unemployment Rate, which was reported at 3.8%. Average Weekly Earnings for the tri-monthly period ending in November are predicted to increase by 3.4% annualized, and Average Weekly Earnings Excluding Bonuses are predicted to increase by 3.1% annualized. Forex traders can compare this to Average Weekly Earnings for October, which increased by 3.5% and to Average Weekly Earnings Excluding Bonuses, which increased by 3.2%.
Here is the key factor to keep in mind today for Japanese Yen trades:

Bank of Japan Policy Rate and 10-Year Yield Target: The Bank of Japan Policy Rate was reported at -0.10%, and the 10-Year Yield Target at 0.00%.Economists predicted a level of -0.10% and 0.00%. Forex traders can compare this to the previously announced Bank of Japan Policy Rate, which was reported at -0.10% and to the 10-Year Yield Target, which was reported at 0.00%.
Should price action for the GBPJPY remain inside the or breakdown below the 142.650 to 143.500 zone the following trade set-up is recommended:

Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 143.100
Take Profit Zone: 137.900 – 139.300
Stop Loss Level: 144.600
Should price action for the GBPJPY breakout above 143.500 the following trade set-up is recommended:

Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 144.600
Take Profit Zone: 146.000 – 146.750
Stop Loss Level: 143.500
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