The British pound surged higher during Thursday’s trading session, showing strong upward momentum. However, a pullback occurred after the yen broke through the ¥195 level, as US GDP numbers came in lower than expected. Despite this, there are other important factors to keep an eye on.
The Bank of Japan is holding a meeting overnight, which will greatly impact trading decisions involving the Japanese yen. There may be a slight pullback as the Japanese government tries to support the yen, but even if they raise rates, the difference will still be significant. Traders will likely continue to take advantage of the positive swap, leading to a long-term upward trend.
Intervention may also occur, providing value in the future due to the favorable swap rates. Retail traders often overlook this, resulting in losses. It’s important to avoid being one of these traders by staying on the sidelines and observing the outcome of the Bank of Japan meeting.
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