Understanding the cross rate behavior can be a little complicated compared with simply dealing with the majors. However it may sound, the Sterling's continued strength weighed heavier compared with the USD and the Japanese Yen.
Positioning earlier in anticipation for a reconfirmation of a breakout have finally gave through in today's price action from the GBPJPY cross rate.Considering currency value, the USDJPY earlier decline in reaction to the decline of the USD was justified. The value on both currency pairs have lost ground due to the Fed's decision to taper-off this September. Adjustments were made to find an eqilibrium level for the two major currency pairs that would try to rebalance the value of trade between the Japan and the US. Thus a probable re-emergance of the currency wars on trade by the central banks would be in play. This would be our fundamental interpretation as to the USDJPY backing the daily trend as of today by pulling back higher from its low @97.75 and currently @99.25 as of this writing.
GBPJPY inline with Yen Weakness
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