February 25, 2021 11:44 PM PST
GBP & JPY Sit in Significant Contrast
Happy Lunar New Year!
Wish all a healthy, wealthy Year of the ox! Financial markets recently
see sentimental buoyancy in the air as the rapid vaccination in the UK
and the US is effective at cutting the number of infections. The US
10-year Treasury yield has risen close to the yearly high of 1.25% amid
the cooling risk aversion. The DXY, unfortunately, didn't take advantage
of the soaring yield but was dragged down by the risk-on tilt.To get
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The
rollout of vaccines in the UK has significantly prevented infections,
which kindled markets' hopes for its economic recovery. As a result, the
pound prices against the US dollar and other non-dollar currencies are
thriving. In terms of major currency pairs, GBP/USD is on track to
challenge the substantial resistance at 1.4400. On the contrary, the
Japanese yen did worst because of the risk-on dynamics and the buoyant
yield, making it possible for USD/JPY to find its initial resistance at
106.11 or even 106.50.
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The short-term trend in the forex market is quite clear. The pound and
yen will sit in significant contrast amid the strong yield. As far as
trading strategies, its a good chance to buy low since the GBP/JPY is
giving up the advances. For this cross currency pair, two short-term
targets are upper standing at 148.00 and 148.87.
Besides the
Japanese yen, gold missed the market expectation as well. Despite the
weak DXY, it failed to gain some momentum from the strong yield. It has
been retreating unstably since Feb. 10. Further support for gold prices
is expected to lie at $1,785 or even $1,764.