GBP/USD Rate May Rise as Japanese Yen Price Falls in Near-Term

Asia Pacific Market Open Talking Points

British Pound and Euro Advance Against the US Dollar

The British Pound and Euro advanced against the US Dollar as Monday’s trading session came to a conclusion. Their strength could be attributed to a slew of better-than-expected European economic data earlier in the day. Markit German Composite PMI showed that the country saw growth for the first time since the third quarter of last year. This is as similar rosy readings from Markit UK Composite PMI turned positive.

The haven-linked US Dollar understandably underperformed relatively speaking as market mood cautiously improved. Investors brushed off the threat of US-Iran geopolitical escalation for now. The anti-risk Japanese Yen met a similar fate as it gave up previous strength. Sentiment-linked crude oil prices turned defensive as supply disruption woes cooled off during the Wall Street trading session. Anti-fiat gold prices trimmed gains.

Tensions between the two nations still remain elevated and do pose a threat for market mood. Meanwhile at the Federal Reserve, usage at the central bank’s overnight repo agreement amounted to $76.9b of securities. That was the highest in just over one month, though short of the $120b ceiling. These open market operations offer near-term liquidity for lenders seeking additional capital in exchange for collateral and interest.

Introduction to Forex News Trading

Introduction to Forex News Trading

Recommended by Daniel Dubrovsky

Gain what you need to know about trading around event risk

Get My Guide

Tuesday’s Asia Pacific Trading Session

Tuesday’s Asia Pacific session is lacking notable economic event risk, placing the focus for forex on swings in sentiment. Regional bourses may follow Wall Street higher and could offer a boost to the pro-risk Australian Dollar as the Japanese Yen weakens. December Philippine inflation data will cross the wires at 1:00 GMT, though USD/PHP arguably remains more focused on risk trends.

British Pound Technical Analysis

Taking a closer look at the GBP/USD daily chart, the rise on Monday followed what appears to have been a top under resistance at 1.3304. It is unclear at this point yet if there is further strength to be had from GBP. Resuming declines entails taking out near-term rising support from November. Though signals from IG Client Sentiment are arguing for the case to the upside at the time of this writing.

GBP/USD
BULLISH

Data provided by



of clients are net long.



of clients are net short.

Change in Longs Shorts OI
Daily 1% 10% 5%
Weekly -6% 10% 0%

What does this mean for Sterling’s trajectory ahead?

Get My Guide

Chart of the Day – GBP/USD

GBP/USD Daily Chart

Chart Created Using TradingView

Starts in:

Live now:

Jan 08

( 01:01 GMT )

Recommended by Daniel Dubrovsky

What Do Other Traders Buy/Sell Bets Say About Price Trends?

Register to webinar

Join now

Webinar has ended

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter