CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Another Day Another Poll

Another Day, Another Poll

Guardian Journalist Owen Jones said today that YouGov MRP Poll shows a significant Tory majority, citing “source”.  Journalist Jones also noted that the margin is narrowing, and if continued at the same pace in the next week, would indicate a hung parliament.  This follows polls released yesterday and Monday, which my colleague Ken concisely boiled down yesterday.  Markets seem to be ignoring the part about the hung parliament, and instead are focusing on the  significant Tory lead.  Combine that with a little “risk on” in stocks, and a weak JPY, and we have the makings of a potential breakout in GBP/JPY.

GBP/JPY put in lows on August 12th and September 2nd, creating a double bottom.  Price traded higher since then and halted between the 61.8% Fibonacci retracement level from the highs on March 13th to the lows on August 12th  near 140.38 and the horizontal resistance near 141.00 forming a potential flag/pennant formation. Price has broken through the 141.00 level and closed today at its highest level since May near 141.50.  If GBP/JPY breaks above 141.70, it will have broken above the flag and we can start looking at a potential target near 150.00.

Source: Tradingview, City Index

On a 240-minute chart, it is easy to see the flag range that GBP/JPY has been in since mid-October, however Monday and today have been extremely strong days.  Price gapped open on Monday at 139.70 from  a close of 139.57 on Friday.   Since the opening on Monday, price seems to be forming a possible AB=CD harmonic formation,  where the length of wave AB equals the length of wave CD.   That would bring price to the top of the channel.  If GBP/JPY breaks through this resistance zone, it may easily squeeze through the top of the flag near 141.70 (see daily).

Source: Tradingview, City Index

The focus on this pair over the next few weeks will be twofold.  First, the release of headlines regarding the upcoming elections and new polls will drive this pair as that seems to be the only thing GBP traders are watching into December 12th.  Secondly, Yen traders are focusing on the US-China trade war.  If the headlines are positive, or if a deal gets signed, USD/JPY should trade higher with risk, which should bring GBP/JPY higher along with it.


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024