The typically hyper-volatile pair has, as of late been extraordinarily level in a side trend. Compromising situations in both Japan and England have brought about market consensus that a move is not necessary, and while Japan might end up recovering, England seems to be in trouble. The pair is currently at multi year lows, and seems to be poised to go into a breakout, but only time will tell at this point. Dovish tones coming out of the Bank of England have not caused any change on the forex quotes of the pair. Conservative elements rising up within the nation do seem to be making an impact though, and while London’s recent riots made a huge impact on the nation’s economy it is on the mend. The riots that occurred in England were a response to very necessary austerity measures that have helped it to be taken more seriously.
Unlike the rest of Europe England has taken a tough stance on many of its entitlement programs, and while this has not made it very popular with its own population, investors see it as a good sign. While in the short term the Pound has dropped against the Yen it is only a matter of time before a channel breakout occurs just past the 120.00 level. Given the volatility of this pair keeping an eye out for this breakout would be highly advisable, given that the profits will be extreme. There is no longer any question as to whether this breakout will occur, it is just a matter of when. This is going to be one of the major movers in the next week or two on the online forex exchange.
Japan’s continued recovery and increasingly friendly relations with China are bolstering their economy; these facts are not lost on anyone. Japan is home to the world’s second largest economy, and this will create the potential for this pair to continue to side trend. Even though they are not part of the EU, fallout from the troubles in the EU have often found their way into the economics of the UK. While it is not fair and indeed quite unfortunate it has been a fact as of late. The need for the English to re-examine their economic policies once again has come about, and undoubtedly it will once again result in necessary austerity measures that could cause further social instability in the day to day operations of the country
The author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to stay up to date with the latest forex quotes.