The uptrend continues, but the rates remain within a price correction. In June-July, the pound has been under pressure due to the increase in the incidence of coronavirus in Britain, despite the fact that more than half of the population of the United Kingdom has already been vaccinated.
This week, the pound not only received support, but also turned out to be the strongest currency. This became possible after reports from the Bank of England that the rate will be raised next year. In addition, given the high inflation, the Economic Stimulus Program is likely to be paused. At the same time, the growth of the pound continues to be restrained under the influence of the pandemic, and unemployment rose by 0.1% in May, when the British economy was still functioning under quarantine restrictions. By the way, those will be removed on Monday, July 19.
The Japanese yen receives support solely due to its status of a safe asset because the Japanese economy is still in a decline, and the meeting of the Bank of Japan, which took place this week, did not bring anything new for investors. Perhaps the situation will change next week, when we receive data on the trade balance in Japan. According to the forecasts, the trade deficit is expected to double in June. Also, Japan will publish data on inflation, which is a painful issue for the Japanese economy.
Most technical analysis tools indicate the effectiveness of sales transactions and the continuation of the price correction. We, in turn, consider the pound to be a more promising currency than the yen, and we consider the purchase of the pound to be a more profitable solution in the long term. Therefore, our choice for today are the deals to BUY.
