Jump to content

Haven demand and growing UK struggles likely to drive GBP/JPY weakness

Recommended Posts

Haven demand and growing UK struggles likely to drive GBP/JPY weakness

GBP/JPY looks likely to fall further, with the construction PMI highlighting the growing hurdles faced by the UK economy.

bg_pound%20GBP%20sterling%2003.JPGSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Wednesday 06 October 2021 

Construction PMI highlights growing economic struggles

The UK is facing a growing economic crisis as energy prices surge and supply-chain friction make business increasingly difficult.

That was evident in today’s construction Purchasing Manager's Index (PMI) reading, with the survey seeing costs rise, supply shortages worsen, and output growth slow for a third consecutive month. The situation is clearly taking a turn for the worse, and businesses are likely to bear the brunt of it.

On a wider scale, the UK is faced with a particularly bad time to be cast adrift of mainland Europe from a regulatory perspective, with Brexit bringing additional friction when seeking to bring supplies into the country.

That provides a warning sign that we could see the economic recovery derail somewhat, raising demand for havens over the pound.


Construction_PMI_ACTIVITY.PNG.pngSource: IHS Markit; CIPS

GBP/JPY looks set for another turn lower

GBP/JPY has been on the back foot today, with the pair turning lower in what looks like a continuation of the four-month downtrend seen since May.

Looking at the daily chart, we can see how trendline resistance has once again come into play here. A break up through 152.57 would bring about a more positive outlook, yet the bulls are expected to remain in charge until such a break occurs.


GBPJPY-Daily61021.pngSource: ProRealTime
Link to comment
15 hours ago, neonred said:

Well done Josh Mahony , saw you on Yahoo finance today . I managed to get caught out on that Gas pull back.  have to say wasn't expecting that. Nice interview


Hi @neonred

Thanks, I will pass on the remarks to Joshua Mahony. We wish you well for the future.


All the best - MongiIG

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 13:53

    Newest Member
    Joined 29/01/23 22:47
  • Posts

    • Maximize Your Stock Market Returns: Latest News on SP500, Top Tech Stocks with Elliott Wave Analysis and Trading Strategies Stay Ahead of the Stock Market with the Latest News and Analysis on SP500, Top Tech Stocks, US ETF Sectors and Trading Strategies. Get up-to-date insights on the bullish weekly cycle, Elliott wave analysis and profitable trading opportunities in the finance sector with top companies like Apple, Tesla, Amazon, Microsoft, JPMorgan and more. Stock Market Content: SP500, AAPL, AMZN, NVDA, TSLA, GOOGL, BRK.B, SQ, META, NFLX, ENPH, MSFT, BAC, JPM. US ETF Sectors. Elliott Wave Analysis US Stocks News: Apple (AAPL),Tesla (TSLA), Amazon (AMZN), Nvidia (NVDA), Microsoft MSFT, Berkshire Hathaway (BRK/B), Block, Inc (SQ), Meta Platforms, Netflix (NFLX), Enphase (ENPH), Alphabet GOOGL. XFL Finance Sector ETF, JPMorgan JPM & Bank of America BAC, Goldman Sachs Group Inc (GS) Stock Market Summary TradingLounge Bullish Weekly Cycle in play, Bullish Monday Profit Taking Tuesday Elliott Wave Analysis: (iii) of iii) of 3 Trading Strategies: Long Video Chapters 00:00 SP500 04:45 Apple (AAPL) 08:01 Amazon (AMZN) 11:00 NVIDIA (NVDA) 11:34 Meta Platforms (META) 17:47 Netflix (NFLX)  18:59 Enphase (ENPH) 22:04 Tesla (TSLA) 24:06 Alphabet (GOOGL)  29:16 Microsoft (MSFT) 34:52 Berkshire Hathaway (BRK.B) 35:56 Block Inc. (SQ)  37:28 Bank of America BAC 25:22 TRIAL Buy 1 Month Get 3 Months  Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  
    • Does anybody know the BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) equivalent with a GBP currency hedge? I want the interest yield but I don't want the currency risk.
    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
  • Create New...