GBP & JPY Sit in Significant Contrast| Influencer‘s Insight •Jasper Lo

Happy Lunar New Year! Wish all a healthy, wealthy Year of the ox! Financial markets recently see sentimental buoyancy in the air as the rapid vaccination in the UK and the US is effective at cutting the number of infections. The US 10-year Treasury yield has risen close to the yearly high of 1.25% amid the cooling risk aversion. The DXY, unfortunately, didn't take advantage of the soaring yield but was dragged down by the risk-on tilt.

The rollout of vaccines in the UK has significantly prevented infections, which kindled markets' hopes for its economic recovery. As a result, the pound prices against the US dollar and other non-dollar currencies are thriving. In terms of major currency pairs, GBP/USD is on track to challenge the substantial resistance at 1.4400. On the contrary, the Japanese yen did worst because of the risk-on dynamics and the buoyant yield, making it possible for USD/JPY to find its initial resistance at 106.11 or even 106.50.

The short-term trend in the forex market is quite clear. The pound and yen will sit in significant contrast amid the strong yield. As far as trading strategies, its a good chance to buy low since the GBP/JPY is giving up the advances. For this cross currency pair, two short-term targets are upper standing at 148.00 and 148.87.

Besides the Japanese yen, gold missed the market expectation as well. Despite the weak DXY, it failed to gain some momentum from the strong yield. It has been retreating unstably since Feb. 10. Further support for gold prices is expected to lie at $1,785 or even $1,764.