Awakening Of The Dragon (15 November 2019)

GBP/JPY has been ranging around the key level of 140 for the past one month as we head towards the U.K. General Election on 12 December.

Recently, Brexit party leader Nigel Farage announced that his party will not be contesting for the 300 seats won by the Conservative party back in the 2017 election. Furthermore, Mr Farage confirmed that his party will be contesting for seats held by the Labour party next month, possibly diluting Labour Party’s strength in the Parliament in the future. This turn of the tide greatly increased Prime Minister Boris Johnson’s chance of winning the General Election with the latest election polls summary stating that the Conservative party’s chance of winning is 39% while the Labour Party’s chance of winning is 27%.

At the moment, the U.K.’s economic indicators are not having any great impact on the movement of pound with the exception that two monetary policy committees voted for a cut in the Official Bank Rate during the recent monetary policy meeting. Nonetheless, it is unlikely that there will be a change in the Official Bank Rate before Brexit takes place.

As GBP/JPY’s range gets narrower, be cautious of any false breakouts. Pay attention to any U.K. General Election news and announcements targeting the chance of winning for the Conservative party as it may end the month-long range with a strong breakout.