Forex traders will start the new trading week with a light economic calendar which will likely see an extension of existing trends across currency pairs. Starting off on a positive note, UK property website Rightmove reported a 6.1% annualized increase in UK home sales for August. As Brexit is nearing, UK consumers enjoy a strong labor market with the biggest wage increases in 11 years. The British Pound has started to recover last week from multi-month lows which resulted in a breakout of the GBPJPY above its horizontal support area. Will this breakout turn into a bigger rally with no resistance in its way? Today’s fundamental analysis will take a look at the upside potential in this currency pair and evaluate the downside risk.

The Japanese trade balance posted a bigger than expected deficit for July as imports as well as exports continued to contract due to the slowing global economy, the US-China trade war as well as Japan’s own trade dispute with South Korea. The Japanese Yen saw an outflow of capital following the depressing economic data. Adding to the selling pressure was the Japan Reuters Tankan Index for August which dropped into negative territory. Are forex traders exiting their long Japanese Yen trades as the Bank of Japan vowed to step in and weaken its currency? Subscribe to the PaxForex Daily Fundamental Analysis now, get your GBPJPY trading set-up and earn more pips per trade!