GBP\/JPY remains resilient, encountering resistance near 209.00 yet holding firm above 208.20. This steadiness is partly due to Japan’s lacklustre GDP figures and fiscal concerns impacting the Yen.<\/p>\n
The Pound benefits from Yen weakness and is near multi-year highs around the 208.90 mark, with declines restricted above 208.20. Japan’s Yen is pressured by economic growth concerns and plans to introduce a USD 137 billion stimulus package.<\/p>\n
Technically, GBP\/JPY is consolidating after a 1.7% increase over two weeks. The RSI indicates momentum easing from overbought levels, while the MACD shows continued positive momentum. Immediate support exists at 208.24, with further support at 207.35 and trendline support around 206.30.<\/p>\n
On the upside, surpassing Tuesday’s high of 208.95 and breaking the 209.15 Fibonacci extension could bring the 210.00 mark into view. The pair is targeting 210.30 based on triangle measurement.<\/p>\n
This week’s Yen performance shows it strongest against the Swiss Franc. The currency’s percentage changes are noted, with significant declines across most peers, demonstrating its weakened state relative to others. The currency heat map presents percentage shifts of major currencies against each other, offering a comprehensive weekly overview.<\/p>\n
The fundamental weakness in the Japanese Yen continues to be the dominant story for us, making long GBP\/JPY positions attractive. The Bank of Japan has given no indication of pivoting from its ultra-loose monetary policy, especially after national Core CPI for November, released last week, came in at a disappointing 0.5% year-over-year. This creates a stark contrast with the Bank of England, which is holding rates steady to fight inflation.<\/p>\n
Given this backdrop, we see value in buying call options with strike prices aiming for the 210.00 psychological level in the coming weeks. The technical picture supports this, with the pair consolidating above the 208.20 support area. This suggests any dips are buying opportunities rather than a change in trend.<\/p>\n
For those looking to generate income, selling out-of-the-money put options with a strike below the 207.35 support level could be a viable strategy. This approach capitalizes on the expectation that the pair will remain firm and not break down significantly in the near term. The primary risk remains a sudden shift in policy, but that seems unlikely before the new year.<\/p>\n
We are reminded of the classic Yen carry trade dynamics that drove the pair to extreme highs in the period leading up to 2008. The interest rate differential between the UK and Japan is now the widest it has been in over a decade, funding this upward momentum. Sustaining a break above 210.00 would be significant, as we have not seen such levels hold since mid-2015.<\/p>\n
The broad-based weakness of the Yen, as seen against all major currencies this past week, reinforces our conviction. The Yen has lost nearly 1% against the US Dollar and over 1% against the New Zealand Dollar, showing this is a uniquely Japanese story. Therefore, even if the Pound shows some independent weakness, the Yen’s decline should cushion the GBP\/JPY pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/JPY holds above 208.20 amid Yen weakness; targets 210.30 with support at 208.24 and 207.35.<\/p>\n","protected":false},"author":62,"featured_media":17045,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=36500"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36500\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17045"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}