There is a very interesting seasonal pattern approaching in the GBPJPY pair.
Recent gains in the pound are starting to look stretched. The Bank of England has been hiking interest rates to deal with rising inflation and that's resulted in a stretched long position in the CFTC report. However, the impact of these rising interest rates is now starting to be felt in the UK economy. Retail sales have recently fallen in the UK. The housing market is now in one of the weakest places it's been for the last 12 years. Therefore the Bank of England may be more hesitant to hike interest rates now and feel that a lot of the banks' work has been done.
In contrast, the Bank of Japan may still need to exit its yield curve control policy, and maybe even start raising interest rates. The weakness in the yen is of concern politically in Japan, and the Ministry of Finance could intervene and strengthen the yen at any point. Therefore pound yen selling does make sense from a fundamental macro perspective.
Seasonally the GBPJPY has a very weak period with over 85% falls around the 20th of September to the 8th of October for an average fall of 2.16%, So is the GBPJPY now ready to fall?
Major Trade Risks: The biggest risk here is that the monetary policy outlook from the Bank of England and the Bank of Japan changes.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
