Chart of the Day GBPJPY
GBPJPY Potential Reversal Zone - Probable Price Path
GBP: The market continues to wait and see the progress of the negotiations between the UK and the EU and whether the UK epidemic will worsen. Bloomberg earlier quoted sources as reporting that the United Kingdom may intend to make concessions and amend the Internal Market Act to try to reach a trade agreement with the EU. The pound against the dollar broke through the 50-day average of 1.301 in the early stage. However, the British government’s negotiating stance remains tough. Barnier, the chief negotiator of the European Union's Brexit, and Frost, the British negotiator, expressed his willingness to step up negotiations and began work on the legal text of the agreement. Frost Treasury believes that the EU still needs to make a fundamental change in the way it negotiates and has to show that it has changed. Earlier, a spokesperson for the Prime Minister’s Office reiterated that the UK will not continue negotiations on a trade agreement after this year.
JPY: Japanese media quoted government officials as reporting that Japan and China are close to reaching an agreement to restore business travelers. If the conditions are met, some business travelers may be exempted from the 14-day quarantine. Japanese Prime Minister Yoshihide Suga and Vietnamese Prime Minister Nguyen Xuan Phuc met in Hanoi. Both sides agreed to resume passenger flights suspended due to the epidemic. Japan will also provide Vietnam with defense equipment
From a technical and trading perspective, the GBPJPY is currently trapped in a consolidation pattern between the weekly and monthly pivot points (136.40/137.40), currently this consolidation has a bullish tone. Bullish exposure should be rewarded ona topside breach of the 137.40 resistance, eroding the descending trendline and opening an upside expansion, initially targeting a testo the 138 cycle high enroute to an ideal equality objective sited at 140.17, this area not only retains the equality objective, it is also the the 78.6% Fibonacci retracement of the September decline.
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