GBPJPY: JAPANESE DEFINITION!

Technical analysis:

The current trend for GBPJPY is still on the rise as indicated by the price line. The RSI shows an imbalance but doesn't indicate an oversold situation. The 2 EMAs are also providing support to the uptrend. In summary, it can be expected that GBPJPY will continue to increase in the upcoming days.

Market overview:

Monetary authorities in Japan have suggested that the yen may experience renewed pressure after a three-month period of easing. Despite the Bank of Japan maintaining its existing policies, the yen is at risk of being negatively affected by an intensified interest rate differential game. This game is expected to be more aggressive than last year, as yield spreads between Japan and the US have widened for both short and long-term yields. Japan can use the current higher interest rate environment to competitively devalue its currency to support national exporters. This is an opportunity that was missed during the previous decade, when interest rates were at zero.

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Unexpected upturn in mortgage activity, investors should also look for a sustained rise in inflation
In addition to the unexpected upturn in mortgage activity, investors should also look for a sustained rise in inflation. These reports pressure the Bank of England to tighten monetary policy. And this is good news for the British Pound, where interest rates and bond yields are lower than in the US.

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The Fed may be telegraphing a pause in its rate-hike campaign, but a US economy that hasn’t stopped churning out jobs could get in the way.

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