Final GDP as well as total business investment data for the second-quarter is expected to remain unchanged. Over the weekend, PM Johnson stated that he will not resign as this could result in a Brexit delay. As the political impasse continues and the Brexit deadline is approaching, the British Pound is expected to come under more pressure which will push the GBPJPY further to the downside. How will today’s UK economic data impact price action? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this trade!
Economic data out of Japan showed a bigger-than-expected contraction in preliminary industrial production for August in a sign that the global economic slowdown is in full swing. This was countered by a bigger-than-expected rebound in retail sales, but the housing sector came in much worse than anticipated. This mixed bag of economic data kept the GBPJPY sliding lower as Brexit uncertainty is overshadowing economic weakness out of Japan. Will price action extend its sell-off? This morning’s fundamental analysis will take a look at the downside potential as well as the upside risk in this currency pair.
Here are the key factors to keep in mind today for British Pound trades:
- UK Lloyds Business Barometer: The UK Lloyds Business Barometer for September was reported at 2. Forex traders can compare this to the UK Lloyds Business Barometer for August which was reported at 1.
- UK Consumer Credit and Net Lending Securities on Dwellings: UK Net Consumer Credit for August is predicted at £0.9B and Net Lending Securities on Dwellings is predicted at £4.2B. Forex traders can compare this to UK Net Consumer Credit for July which was reported at £0.9B and to Net Lending Securities on Dwellings which was reported at £4.6B.
- UK Mortgage Approvals: UK Mortgage Approvals for August are predicted at 66.5K. Forex traders can compare this to UK Mortgage Approvals for July which were reported at 67.3K.
- UK Current Account Balance: The UK Current Account Balance for the second-quarter is predicted at -£19.0B. Forex traders can compare this to the UK Current Account Balance for the first-quarter which was reported at -£30.0B.
- UK GDP and UK Total Business Investment: The final UK GDP for the second-quarter is predicted to decrease by 0.2% quarterly and to increase by 1.2% annualized. Forex traders can compare this to the previous UK GDP for the second-quarter which decreased by 0.2% quarterly and which increased by 1.2% annualized. Final UK Total Business Investment for the second-quarter is predicted to decrease by 0.5% quarterly and by 1.6% annualized. Forex traders can compare this to the previous UK Total Business Investment for the second-quarter which decreased by 0.5% quarterly and by 1.6% annualized.
- UK M4 Money Supply: UK M4 Money Supply for August is predicted to increase by 0.6% monthly and by 2.5% annualized. Forex traders can compare this to UK M4 Money Supply for July which increased by 0.7% monthly and by 2.7% annualized. UK M4 Money Supply excluding IOFCs 3-Month Annualized for August is predicted to increase by 4.2% annualized. Forex traders can compare this to UK M4 Money Supply excluding IOFCs 3-Month Annualized for July which increased by 4.4% annualized.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Industrial Production: Preliminary Japanese Industrial Production for August decreased by 1.2% monthly and by 4.7% annualized. Economists predicted a decrease of 0.5% monthly and of 3.9% annualized. Forex traders can compare this to Japanese Industrial Production for July which increased by 1.3% monthly and by 0.7% annualized.
- Japanese Retail Trade Data: Japanese Retail Trade for August increased by 4.8% monthly and by 2.0% annualized. Economists predicted an increase of 2.4% monthly and of 0.7% annualized. Forex traders can compare this to Japanese Retail Trade for July which decreased by 2.3% monthly and by 2.0% annualized. Large Retailer’s Sales for August increased by 0.4% monthly. Economists predicted an increase of 0.8% monthly. Forex traders can compare this to Large Retailer’s Sales for July which decreased by 4.8% monthly.
- Japanese Vehicle Production: Japanese Vehicle Production for July increased by 11.8% annualized. Forex traders can compare this to Japanese Vehicle Production for June which decreased by 1.5% annualized.
- Japanese Housing Starts and Construction Orders: Japanese Housing Starts for August decreased by 7.1% annualized to 0.891M units. Economists predicted a decrease of 6.1% annualized to 0.902M units. Forex traders can compare this to Japanese Housing Starts for July which decreased by 4.1% annualized to 0.910M units. Construction Orders for August decreased by 25.9% annualized. Forex traders can compare this to Construction Orders for July which decreased by 26.9% annualized.
Should price action for the GBPJPY remain inside the or breakdown below the 132.300 to 133.300 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 132.500
- Take Profit Zone: 128.000 – 129.100
- Stop Loss Level: 134.000
Should price action for the GBPJPY breakout above 133.300 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 134.000
- Take Profit Zone: 135.700 – 136.250
- Stop Loss Level: 133.300
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