Should we keep an eye on a potential rebound in the GBP/JPY pair?
08.12.2021
- U.S. 10-Year Treasury Auction
- U.S. MBA Mortgage Applications Index
Yesterday, the three major U.S. stock indices all extended their gains, continuing the risk-on market characterized by rising stock prices, interest rates, and crude oil prices. Concerns over the spread of the Omicron variant of the novel coronavirus subsided, leading to a wave of buying across the market. WTI crude oil has recovered to $71.80 per barrel.
In the foreign exchange market, the downward trend in GBP/JPY appears to be stabilizing, with the pair now locked in a battle around the 150.45 level. From a technical perspective, GBP/JPY fell by about a third after being capped by the 200-period simple moving average (SMA) on the hourly chart, and is now attempting to rebound during today’s Asian trading session. We need to carefully assess whether buying interest will emerge in GBP/JPY.
Today, at 5:15 PM, ECB President Lagarde will speak; at 8:00 PM, South African retail sales will be released;at 9:00 PM, the U.S. MBA Mortgage Applications Index; at 12:00 AM, the Bank of Canada’s policy rate and statement, along with the U.S. JOLTS survey; at 12:30 AM, U.S. weekly crude oil inventories; at 3:00 AM, the U.S. 10-year Treasury auction; at 6:45 AM the following day, New Zealand’s Q3 manufacturing sales; and at 7:00 AM, remarks by RBA Governor Lowe.With stock prices rising globally, we will closely monitor whether the currency markets will also shift to a risk-on sentiment.
Author: Keisuke Sakurai
