Today’s GDP for USD is forecast 1.8 from last 1.1 while 1.59 and 1.44 is my own targets. The 1.8 forecast must break significant points at 1.27, 1.78 and 1.79 to instill any bright economic recoveries. Yet bright economic recoveries at 1.8 places GDP overall in middle range from 1.79 to upper averages at 2.44 and 2.54. Below 1.78 then GDP remains at lower end of its ranges.
Why 1.8 is vital is because GBP/JPY correlates to USD/JPY at 94%. GBP/JPY is essentially a USD pair and will rise and fall with USD/JPY. The bottom end of the correlation is located at 68% and its lowest at 42% which means GBP/JPY and USD/JPY will remains partners for a long period in the future. A rise in GDP will see higher prices in USD/JPY and GBP/JPY.
What prevents GBP/JPY from rising is 103.71 in USD/JPY. For GBP/JPY to rise then 103.71 must break in USD/JPY. Currently GBP/JPY is built upon a base at 136.31. Current bottom today is located at 135.99 alongside significant points built into current prices 136.04, 136.26, 136.31, 136.36 and 136.39. Overall, the GBP/JPY price is on the floor and low. GBP/JPY 134.98 begins severely oversold.
The big point break above is located at 146.35 and channel top at 140.36. Only a break of 140.36 would see a run to 146.35. To move higher today, GBP/JPY must break 136.73, 136.75, and 136.85. Then targets become 137.04, 137.51 and overbought patches at 137.85 and 137.99.
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Brian Twomey, Inside the Currency Market, btwomey.com