Cross-assets prepare for correction

#GBPJPY

Key zone: 198.50 - 200.00

Buy: 200.00 (on a strong positive foundation); target 202.50-203.00; StopLoss 199.30

Sell: 198.00 (after a retest of the 199 level); target 195.50; StopLoss 198.70

A prolonged calm in major cross-currency pairs reflects not a pause, but a state of market equilibrium. Fundamental drivers for a strong impulse are still insufficient, while traders’ attention remains focused on the dollar. But we know: a long flat is a precursor to a new trend.

Forecasts for key statistics on EUR, GBP, and AUD suggest minimal changes. This means that the data will come out mixed and are unlikely to significantly affect cross-pair dynamics.

The fundamental background remains tense: Europe lives under high geopolitical uncertainty. Market attempts to pre-price a Ukraine-Russia truce scenario look premature, while in reality the dollar remains the decisive factor for currency moves. Talks and statements may follow one after another, but they lack the strength to push cross-rates out of flat.

The FOMC minutes have already lost relevance for speculators, and the market essentially ignores the rest of the news.

The UK presented strong inflation data: CPI in services is fixed at 5%, and the core price index exceeded forecasts. This temporarily supports the pound, but slowing economic growth could neutralize this effect in the medium term.

The situation with the yen remains ambiguous. On one hand, political instability traditionally weakens the currency through a risk premium. On the other hand, expectations of Bank of Japan tightening and rising JGB yields support the yen.

The political backdrop is also mixed: in July, the ruling coalition lost its majority in the upper house, but the prime minister retained his post — at least until the US-Japan tariff deal is finalized. Negotiations are closed-door, leaving the market searching for alternative anchors.

The Japanese stock market closed lower on Wednesday: Nikkei 225 lost 1.42% under pressure in transport and communications. At the same time, the yen strengthened on bond yield stabilization, while the euro received mixed signals due to cooling inflation.

There are no clear technical signals: for example, EUR/JPY is testing support at 171.32 (the July 22 low) for the second time. So far, movement boils down only to StopLoss triggers on both sides, with no signs of a sustainable trend. For GBP/JPY, the fundamental background is also rather neutral, with limited pound support.

The current configuration justifies a cautious bearish or neutral outlook. The dollar remains the key driver — only it can push cross-pairs out of the range.

So we act wisely and avoid unnecessary risks.

Profits to y’all!