GBPJPY Fundamental Analysis – July 18th 2019

The British Pound stabilized following yesterday’s inflation data and forex traders are now awaiting retail sales data which is scheduled for release this morning. Economists predict a monthly contraction, but a pick-up in activity on an annualized basis. Will this suffice to pressure the GBPJPY into a short-covering rally? Which impact will the Bank of England Bank Liabilities and Credit Conditions Survey have on the British Pound? Today’s fundamental analysis will cover the potential for price action moves in both directions.

Here is the key factor to keep in mind today for British Pound trades:

• UK Retail Sales: UK Retail Sales for June are predicted to decrease by 0.2% monthly and to increase by 2.6% annualized. Forex traders can compare this to UK Retail Sales for May which decreased by 0.3% monthly and which increased by 2.2% annualized. UK Retail Sales Including Auto and Fuel for June are predicted to decrease by 0.3% monthly and to increase by 2.6% annualized. Forex traders can compare this to UK Retail Sales Including Auto and Fuel for May which decreased by 0.5% monthly and which increased by 2.3% annualized.

The Japanese trade balance surprised to the upside in June, but the better-than-expected reading came on the back of a slump in imports. Exports also decreased more than anticipated in the latest sign that the global economy is cooling faster than economists predicted. The GBPJPY remains trapped in cross-currents as bears want to sell due to weak economic data and bulls want to buy due to safe-haven demand. Follow the PaxForex Daily Fundamental Analysis and build a profitable forex portfolio with the help of our expert analysts!

Here is the key factor to keep in mind today for Japanese Yen trades:

• Japanese Trade Balance: The Japanese Trade Balance for June was reported at ¥589.5B. Economists predicted a figure of ¥403.5B. Forex traders can compare this to the Japanese Trade Balance for May which was reported at ¥968.3B. The Japanese Adjusted Trade Balance for June was reported at -¥14.4B. Economists predicted a figure of -¥140.9B. Forex traders can compare this to the Japanese Adjusted Trade Balance for May which was reported at -¥621.5B. Exports for June decreased by 6.7% annualized and Imports decreased by 5.2% annualized. Economists predicted a decrease of 5.4% and of 0.2%. Forex traders can compare this to Exports for May which decreased by 7.8% annualized and to Imports which decreased by 1.5% annualized.

Should price action for the GBPJPY remain inside the or breakout above the 133.550 to 134.600 zone, the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 134.000
• Take Profit Zone: 138.900 – 139.550
• Stop Loss Level: 133.550

Should price action for the GBPJPY breakdown below 133.550 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 133.150
• Take Profit Zone: 130.850 – 131.700
• Stop Loss Level: 133.550

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