GBPJPY

GBPJPY

Introduction to GBPJPY

The GBP/JPY pair tells the trader how many Japanese Yen (the quota currency) is needed to buy one British Pound (the base currency). It is known to be a carry currency cross, which is a cross that is a carry-trading vehicle (one of the most popular trading strategies of today). A carry trade occurs when a person sells or borrows an asset with a low-interest rate to buy another asset with a higher interest rate. This strategy is used extensively on the foreign exchange (forex) market.

About GBPJPY

GBPJPY is the ticker symbol for the British sterling pound and the Japanese yen exchange. Both currencies are among the top eight global currencies. The GBP is the fourth most traded currency as of October 2019, while the JPY takes the third spot. Because the US dollar (USD) is not used to calculate its exchange rate, the GBP JPY is known as a ‘cross pair’ and falls within the ‘minor’ group on the Forex market. GBP JPY is almost synonymous with Forex trading volatility. An inherent feature that has earned the pair multiple nicknames like: ‘The Beast,’ ‘The Dragon,’ ‘The Widow Maker,’ and ‘The Geppy.’
 
The GBP is the base currency in the GBP-JPY forex exchange, while the JPY is the quotation currency. This means the GBP-JPY pair’s price reflects the amount of Japanese yen it will cost to trade for one unit of the British pound sterling at any given time. The GBPJPY blends currencies which have an complex and rich past. The pound sterling predates modern-day civilization. It was the de facto ‘global’ currency even once before making way for the US dollar. Since the fall of the Bretton Woods Monetary System in 1971, it developed to its current form. The GBP has had two significant highlights in its price history since then.
 
On September 16, 1992, the UK was forced to exit the European Exchange Rate Mechanism. The pound plummeted by more than 25%; a day that would earn the moniker ‘Black Wednesday.’ When the UK public chose to leave the European Union (Brexit) in 2016, the GBP lost more than 10% of its value within one day. The Japanese yen was adopted by the Mejji government in 1871 and is without doubt one of the oldest currencies still in circulation today. The yen has always had an unusual pricing movement thanks to the special and powerful role Japan plays in the global economy. The nation has a large industrial base. This base is with an intriguing combination of mining, technology and investment in agriculture. As a result, Japan is one of the biggest exporters in the world.
 

Technical Analysis For GBPJPY

For the same reason that it is dangerous, Geppy is popular – it moves with extreme volatility. It’s exciting and has both the potential for large scores and devastating losses. Tight stops and poor risk management with this pair can kill your account in a matter of days and not weeks. It attracts beginners because of its promised delivery of pips – price interest points. But this is definitely a pair which should keep beginners away from.
 
Volatility can cause a sound trading system to lose money because the pair’s veracity is often trendless. Geppy Trading can be traded with extreme caution and very good risk management. This pair was known to move an average of 150 pips a day, and on some days it moves as many as 200 pips. Stop losses must be set broadly, and the lot sizes should be small. Any merchants will slash their usual size of exchange to around 1/3 or even 1/4 of their normal size of business. The upside of that is you can pursue higher targets. Starting Out This pair needs considerable respect. The moves are fast happening, and they are big. If you intend to scalp yourself, be careful not to get yourself scalped. If you’re a beginner, find another pair to trade until Forex trading hang. The longer you have the experience, the better.
 
Even if you are experienced in trading, start trading with “toe in the water” and trade this pair for two to three weeks before moving on to bigger trades. Everyone likes the thought of easily gathering pips but in very short time this pair will give away and take away.you will be fine if you keep that in mind. If you’ve got the hang of it, you can find yourself hooked. If you go to Geppy, it has been said you would never go anywhere.

Fundamental Analysis For GBPJPY

The pair GBPJPY has negative gold correlations. This means the price of the pair continues to increase as that of the precious metal falls, and vice versa. The Japanese yen is considered a safe-haven currency, validating the unfavorable link between the GBP JPY and the gold. Additionally, US real interest rate expectations have also powered the JPY and the gold. The GBPJPY is one of the most volatile pairs on forex markets. Huge price moves and broad ranges ensure that this pair generates many trading opportunities. The Japanese yen (JPY) is a low yielding currency whereas the British pound sterling (GBP) is a high yielding currency. That means the gbp-jpy helps the carry-trade strategy to be implemented by going long overnight with the pair.

Major Bodies Influencing GBPJPY

The Bank of Japan (BoJ) is potentially the forex market’s most powerful central bank. BoJ never shied away from interfering in the currency markets to secure its export backbone. Thus, tracking the monthly rate releases from the bank and accompanying rate statements is important. The GBP-JPY overshoots key data releases as a naturally volatile pair. The Statistics Bureau of Japan publishes vital statistics that influences the GBP JPY market. Watch out for essential pieces of data, such as trade balance figures and GDP numbers in Japan. Bank of England releases rates and rate statements, which can have a major impact on the pound and, consequently, the exchange rate of GBP-JPY. UK National Statistics Office publishes important data for formulating social and economic policy. It is prudent for GBP-JPY traders to track economic data releases. Data such as GDP numbers and labor market statistics such as unemployment rate and wage growth figures.

Here Are the Key Factors to Keep in Mind Today for British Pound Trades

UK’s consumer trust GfK:
UK’s consumer confidence GfK Consumer confidence was registered at -10 for May. Economists had expected a result of -12. Forex traders should equate this with the UK’s GfK Consumer Confidence published at -13 for April.
 
UK lloyds business barometer:
May’s uk lloyds business barometer was written at 10. This can be compared by Forex traders with the UK Lloyds Business Barometer for April reported at 14.
 
UK House Price Index:
The UK House Price Index for May is expected to grow flat at 0.0% a month, and annualized by 1.2%. Forex traders can compare this with April’s UK House Price Index, which rose by 0.4% per month and 0.9% per annum.
 
UK Consumer Credit and Net Lending Securities on Dwellings:
UK Net Consumer Credit is forecast at £0.9B for April, while Net Lending Securities on Dwellings is forecast at £3.7B. Forex traders can compare this to UK Net Consumer Credit for March reported at £0.5B and to Net Lending Securities on Dwellings reported at £4.1B.
 
UK Mortgage Approvals:
UK April Mortgage Approvals are forecast at 63.5K. Forex traders can compare this with march UK Mortgage Approvals reported at 62.3K.
 
UK M4 Money Supply:
UK M4 Money Supply for April is expected to rise by 0.4% per month, and by 1.9% per annum. Forex traders should equate this with UK M4 Money Supply for March which decreased by 0.5% per month and increased by 2.2% per annum. UK M4 Money Supply excluding IOFCs 3-Month Annualized for April is forecast to increase annually by 1.1%. Forex traders can compare this to UK M4 Money Supply excluding March 3-Month Annualized IOFCs which grew by 0.7% annualized.
 

Here Are the Key Factors to Keep in Mind Today for Japanese Yen Trades

2.4%, and 1.63 job-to-applicant ratio. Economists expected 2.4% and 1.63 respectively. This can be contrasted by forex traders with the Japanese jobless rate estimated at 2.5% for march and the job-to-applicant ratio reported at 1.63.
 
Japanese industrial output:
Japanese industrial production estimated rose by 0.6% per month for april and decreased by 1.1% per annum. Economists predicted a monthly rise of 0.2%, and an annualized decline of 1.5%. Forex traders should equate this with Japanese factory output for march, which dropped by 0.6% per month and annualized by 4.3% per annum.
 
Japanese retail trade data:
Japanese retail trade was registered flat at 0.0% per month for april, and an annualized rise of 0.5%. The economists expected a monthly rise of 0.6% and an annualized growth of 0.9%. This can be contrasted by Forex traders to Japanese Retail Trade for March, which rose by 0.2% monthly and by 1.0% annualised. Big Retailer’s April revenues fell by 1.8% a month.economists had expected a monthly fall of 0.9%. Forex traders should equate that to March’s Large Retailer revenues, which rose by 0.6% a month.
 
A person can exchange gbp/jpy either with a forex contract or instead. They can trade a differential contract (cfd) on a different currency pair, and bet on the price difference. A CFD is a financial instrument typically between a broker and an investor. One party agrees to pay the other the difference between the start and end of the trade in the value of a security. You can hold either a long position (speculating the price will go up) or a short position (speculating the price will go down). Since CFDs prefer to be used for a brief time span, this is called a short-term purchase or exchange. For example, to trade the currency pair GBP/JPY using CFDs, you gamble on the path of the underlying asset. When you believe the pound would increase then purchase the CFDs to take a long spot. When you believe the pound would lose interest to the Japanese yen so selling CFDs will take you a short spot. CFDs promote short selling, encouraging anyone to trade regardless of their GBP/JPY trading policy.

The Best Time to Trade GBP JPY

GBP JPY has little correlation in economic indicators and other market-affecting reporting. However, there is a three-hour period of convergence between the Asian and European markets. It is from 5am to 8am GMT, which features jpy’s largest liquidity number.main economic releases can also occur by 9:30 pm in japan. Traders will keep an eye on developments unfolding at this time before European traders wake up and seek to enter the action. Many sources also consider monitoring different hours during the day when official news is going to be published in Japan. Such periods include 6:30 p.m., 1:30 p.m., and 3 a.m.GMT: GMT.

FAQ's

I have actually heard a trader who prefers to trade 15-minute expiration dates on a 15-minute chart, but I feel more comfortable with daily charts. I use daily pivots on the M30 and H1 charts, weekly pivots on H4 and D1 charts, and daily pivots on both charts. In spot foreign exchange trading, I swing the trade, which means I hold a position for an extended period of time.

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