Source: PaxForex Premium Analytics Portal, Fundamental Insight

Japanese FX Reserves for September, were reported at $1.389.8B. Forex traders can compare this to Japanese FX Reserves for August, reported at $1.398.5B. The Preliminary Japanese Leading Index for August was reported at 88.8 and the Preliminary Japanese Coincident Index was reported at 79.4. Forex traders can compare this to the Japanese Leading Index for July, reported at 86.7, and to the Japanese Coincident Index, reported at 78.3. The UK Halifax House Price Index for September increased by 1.6% monthly and by 7.3% tri-monthly annualized. Forex traders can compare this to the UK Halifax House Price Index for August, which increased by 1.7% monthly and by 5.2% tri-monthly annualized.

Europe is experiencing a renewed increase in Covid-19 infections, while Japan has a new Prime Minister who is expected to continue existing policies. PM Yoshihide Suga, in office for three weeks, may boost spending to lift the economy, but safe-haven demand for the Japanese Yen is strong. The CCI moved into extreme overbought territory above 100 and has since retreated. The next few trading sessions will conclude if a new wave of bearishness will take the driver’s seat in this currency pair.

The forecast for the GBP/JPY remains bearish. Price action is located above its ascending Tenkan-sen and its descending Kijun-sen, below a downward sloping Ichimoku Kinko Hyo Cloud. Uncertainty over the US elections keeps forex traders with a partial portfolio in risk-averse assets. Will bears gather enough strength this week to pressure price action into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.

Should price action for the GBP/JPY remain inside the or breakdown below the 136.550 to 137.500 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 136.850
• Take Profit Zone: 133.000 – 134.000
• Stop Loss Level: 138.350

Should price action for the GBP/JPY breakout above 137.500 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 138.350
• Take Profit Zone: 139.500 – 140.000
• Stop Loss Level: 137.500

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