BRITANIAN POINT, US DOLLAR, JAPANESE YEN, GBP / USD, GBP / JPY – TALKING POINTS:
- British pound despite strong UK Q2 GDP data with a 2-year gilded return
- GBP / USD may continue the downward trend after the downward trend continues
- GBP / JPY target after range support breach is less than 152.00
Based on strong GDP data for the second quarter, the pound sterling generally outperformed its major currencies. Production grew by 22.2 percent in the three months to June 2021 compared to the same period in 2020, the fastest annual growth rate in nearly seven decades.
However, Sterling fell after release after a little digestion. Prices were lower alongside interest rates on UK government bonds, meaning that traders did not think that the rise in growth was likely to affect the convex corner of the Bank of England’s monetary policy.
This is likely to reflect the central bank’s somewhat repulsive rhetoric about the recent rise in inflation, which it has confirmed to be temporary, as well as the limited room for growth to keep pace with the rise in the second quarter. The initial reopening following Covid-inspired closures can usually be exhausted.
GBP / USD, GBP / JPY TECHNICAL ANALYSIS
From GBP /USD It appears to have revived the downward trend from its peak in June, with the upward trend in upward support at the end of July. Vendors are now testing the support block in zone 1.3729-98, with daily closing below its lower limit setting the traffic light below 1.3600.
Immediate resistance is in the range 1.3879-1.3910. A setback that raises prices above this barrier and confirms the infringement after daily closing could prove to be a new challenge for the 1,4000 handles. Strengthening above seems to be a precondition for neutralizing severe selling pressure.
GBP / USD daily schedule created TradingView
In the meantime GBP /JPY seems to have receded to a downward trend in resilience, which has pushed prices down since the end of May. Sliding down the range support at 152.55 appears to have paved the way for the pair to retest the support in the 151.15-29 turn zone.
Immediate resistance is 153.49, a barrier that has hampered progress since mid-July. A break that goes beyond what is confirmed by daily closing could undermine sellers’ confidence and allow them to rise to 156.08-61, an increase that peaked in February 2018 and May this year.
GBP / JPY 8 hours chart created TradingView
COMMERCIAL ASSETS OF THE BRITISH POUND
– Written by DailyFX.com APAC chief strategist Ilja Spivak
Use the or comments section below to contact Ilja @IlyaSpivak Twitter