GBPJPY misbehaving

A lot of people seem to thin the GBPJPY is misbehaving or has been slow of late?
Any reasons for this?
If anything, it’s just because it’s been on a massive bullish move since January and the H&S pattern is putting doubts in a few people’s minds?

I like to think of GBP/JPY as being an indicator for risk taking and optimism in the general economy. As the stock market starts moving up and traders risk taking increases, GBP/JPY starts going up. Take a look at EUR/JPY as well. It’s been moving up nicely.

Then when risk aversion comes back, GBP/JPY gets slammed. Even yesterday we had a sharp increase in the VIX which is a good indicator of fear/risk aversion.

Take a look at the attached screenshot. It shows the GBP/JPY candlestick chart with the S&P 500 tracking index overlayed as the white line. When the index hit a low and then rallied in March, we started seeing the GBP/JPY rally along with it.

It looks like the index has broken it’s uptrend so that could spell bad news for the carry trade currencies.

This summer should be an important period to watch for any economic turmoil.

Well IMO the G/J has been alright… As it is a “cross” you have to remember there are two parts to it… The U/J and the G/U… Overall there has been a general weakening of the US dollar, G/U goes up, U/J goes down. Hence the Bull run the G/J has been experiencing.

The relation to the S&P has more to do with the G/U, not G/J itself.

I am looking for a big down side to come but not in the immediate near future, september perhaps. In the near future, I’m thinking up, up 167, then 176…

Trade your charts!


Ummm…GBP/USD rising and USD/JPY falling does not directly equate to GBP/JPY rising. GBP/JPY = GBP/USD x USD/JPY, not GBP/USD divided by USD/JPY. The cross would only rise if cable rose more on a % basis than USD/JPY fell (or vice versa, of course).

Yes of course that is correct, below was just a very simplistic statement to get the general idea.