From the FXWW Chatroom: An unexpected moderation in June UK inflation (Tuesday) should weigh on GBP and BoE tightening expectations this week, in the context of recently confirmed low rates of wage growth (Figure 6). We recommend expressing this tactically bearish GBP view versus the JPY as momentum indicators suggests GBPJPY is currently overbought and dovish BoJ policy is well priced by markets (Figure 5). We target recent lows of 145.30 (above support in the form of the current 50-day moving average of 144.093) with a stop loss at 148.50, above recent highs (spot reference: 147.30). Our target profit implies 1.36% depreciation which is in the 65th percentile of weekly moves in GBPJPY since 2010 and a reward-to-risk ratio of 1.7:1.
This trade recommendation is valid from the Wellington open Monday morning to the New York close Friday.
This trade recommendation is valid from the Wellington open Monday morning to the New York close Friday.
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