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FOREX: GBPJPY Extends Decline as Weak Risk Sentiment Weighs

FOREX
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  • The continued post-NFP themes of a weaker Euro and Pound have continued early Monday. Weak risk sentiment continues to boost the Japanese yen, prompting some significant declines for cross/JPY to start the week.
  • EURUSD has traded below the 1.02 handle, registering fresh cycle lows for the pair at 1.0178. Higher European NatGas prices are providing additional single currency headwinds, as equity weakness particularly weighs on EURJPY, down 0.70% on the session with the 160.00 mark supporting for now.
  • With the bearish EURUSD trend sequence intact, analysts will now look to 1.0138, the 1.764 projection of the Sep 25 - Oct 23 - Nov 5 price swing as the next target for the move.
  • For sterling, 1.2100 has so far held for cable, however the pair is down 0.85% as the negative backdrop for UK assets continues to permeate. We highlighted last week how 190.60 was the first major target for the move in GBPJPY, a trendline drawn from the Aug low. This trendline has been pierced, with the pullback from the Dec 30 highs briefly extending to 4.5%. Given this development, 188.09 will now be in focus, the Dec 03 low.
  • Overall, the USD index is up 0.3% since the open having printed a fresh two-year high above 110.00.
  • US Federal Budget balance data highlights a light Monday schedule. US PPI will cross Tuesday before UK and US CPI data on Wednesday.
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  • The continued post-NFP themes of a weaker Euro and Pound have continued early Monday. Weak risk sentiment continues to boost the Japanese yen, prompting some significant declines for cross/JPY to start the week.
  • EURUSD has traded below the 1.02 handle, registering fresh cycle lows for the pair at 1.0178. Higher European NatGas prices are providing additional single currency headwinds, as equity weakness particularly weighs on EURJPY, down 0.70% on the session with the 160.00 mark supporting for now.
  • With the bearish EURUSD trend sequence intact, analysts will now look to 1.0138, the 1.764 projection of the Sep 25 - Oct 23 - Nov 5 price swing as the next target for the move.
  • For sterling, 1.2100 has so far held for cable, however the pair is down 0.85% as the negative backdrop for UK assets continues to permeate. We highlighted last week how 190.60 was the first major target for the move in GBPJPY, a trendline drawn from the Aug low. This trendline has been pierced, with the pullback from the Dec 30 highs briefly extending to 4.5%. Given this development, 188.09 will now be in focus, the Dec 03 low.
  • Overall, the USD index is up 0.3% since the open having printed a fresh two-year high above 110.00.
  • US Federal Budget balance data highlights a light Monday schedule. US PPI will cross Tuesday before UK and US CPI data on Wednesday.