The yen gained across the board from 9 February as traders woke up to news of a landslide victory by Japan’s coalition government, with the main partner, the Liberal Democratic Party, showing its best ever results since its foundation in the 1950s. The government’s very large majority in Japan’s lower house removes the possibility of political instability there for the time being, while many participants are increasingly convinced that the government’s fiscal plans will aid growth without pressuring public finances excessively.
Against this backdrop, some continuation downward sooner or later would normally be likely, with the confluence of the 38.2% weekly Fibonacci retracement and the 200 SMA being an obvious though quite aggressive target. However, the price is currently testing the 100 SMA and 23.6% weekly Fibo, so it’d be possible to see consolidation around here for some time or possibly a bounce.
Lukewarm GDP from Britain on 12 February means that traders are concentrating more intently on the upcoming job report on 17 February. A higher claimant count change for January or higher unemployment for December might hit the pound here and elsewhere to drive the price lower.
This article was submitted by Michael Stark, an analyst at Exness.
For the latest analysis, ideas for trading and more, follow Michael on X: @MStarkExness.
The opinions in this article are personal to the writer; they do not represent those of Exness. This is not a recommendation to trade.
