BoE & GBPJPY Idea

24. Aug. 2014

It remains that the ongoing improvements in unemployment, a lagging economic indicator, coupled with a solid recovery should eventually lead to a rise in wage growth. As a result, the current weak earning growth may not reflect the current health of the job market as it is an even more lagging indicator than unemployment. Furthermore, the 2-3% rise in the national minimum wage in October could be a catalyst for broader wage growth while supporting household consumption. As the recovery is expected to remain strong while the job market continues to improve, the BoE stays positioned to be the first major central bank to start its tightening cycle.

British pound weakness unlikely to continue - Eye on GBPJPY

The British pound has weakened as the odds to see a hike before year-end has decreased. However, the relative supportive monetary policy should support the Sterling in the longer-term. As a result, I do not consider this weakness as a trend reversal but as a temporary countertrend move. A long position in GBP/JPY remains an attractive vehicle to be exposed to a renewed strength in Sterling.

My recommendation : Buy GBPJPY above 171.50 stop @170.45 ,Target1 173.80 & Target1 174.60 , Good Luck