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1 GBP is currently trading at ~155 JPY, which is an important touchstone for the pair. The GBPJPY last touched (and notably rejected) this level in December of 2017. Before this, a period of consolidation occurred just above this price level in early 2016, before dramatically breaking down to its lowest point in the twenty-tens.

An important question to ask is: Where is the pair headed in the second half of 2021?

Will the pair bounce off this important touchstone and head back down to a sub 155 price level? Or, will the GBP penetrate past this point and head for a price level circa above 160?


An early indication of whether the pair bounces off this touchstone or penetrates it can be found in the smaller time frame charts. At the H4, the bulls show early promise, with some intense upwards pressure at the end of May. The intense upwards pressure occurred after a prolonged period of ranging. A slight drawdown has predictably occurred after this push. However, the pair appears to be moving to the upside again after shaking off the early profit takers.

However, it is far too early to make a call either way.

Let’s look at some events are may affect the trajectory of the pair in the near future. Two important events that I am keeping an eye on are the Tokyo Olympics and the health of the manufacturing sector in Great Britain.

Tokyo Olympics: Will they, won’t they?

Tokyo Olympics yen

The Japanese Government are marching staunchly toward an Olympics opening date of 23 July. But what happens if the Olympics are postponed again? I’m of two minds in this regard. The Yen might strengthen because investors will recognise that the country will be at less risk for another Covid outbreak without thousands of athletes flying into the country to compete. Or, the Yen might weaken, with ‘bad news’ begetting ‘bad news’.

Great Britain Manufacturing PMI (May)

The report hinting at the health of GB’s manufacturing sector is released in half a day. A solid value of 66.1 is expected, the same as last month, signaling that the sector is continuing to expand at a pace.

A spike in demand from China and the US was recorded in April, resulting in a record level of 61.1. I anticipate a slight tapering off in demand moving forward as the cost of inputs rise, and these costs filter into the sticker prices of goods. But this is might now appear until June or July PMI figures.

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