Recent UK data has shown signs of a sharp slowdown. On August 18 UK retail sales came in below the market’s minimum expectations and so did the UK PMI reading on August 23.
With GBP longs showing an extreme long position in the COT report the GBP was always going to be vulnerable to bad news and this resulted in a sharp GBP sell-off on August 23. Furthermore, the slowing of the European and US PMIs brought recessionary fears back to the surface on August 23 and sent bonds surging higher once again.
This move into US Treasuries sent yields lower and helped lift the JPY. So, with markets nervous about the prospects of global growth will we see more bond buying? With GBP longs stretched will we see more GBP downside? Looking at the seasonals ahead for the GBPJPY there is marked weakness ahead.
Over the last 15 years, between September 18 and October 09, the GBPJPY has fallen 80% of the time for an average fall of 2.84%. Will that repeat again this year?
Major Trade Risks: The biggest risk here has to do with the path of US monetary policy and that of the UK’s economy/inflation pressures.
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.
