More than anything else, this is a pair that is highly sensitive to risk appetite. With tariffs being levied by the United States and the Chinese and the Chinese looking to retaliate, it makes sense that this pair would drop. We continue to dance around in general, but I believe that the ¥147 level above is significant resistance, but even if we break above there I think that there is even more resistance above at the ¥148 level. The markets have been consolidating for some time, but if we get some type of global escalation of trade wars, this would more than likely send this market down to the ¥145 level rather quickly.
As we go into the weekend, there are several potential flashpoints out there that could send the market slower, so I think that rallies at this point it’s likely that we will be selling at the first signs of weakness. However, if we were to break above the ¥148 level, it’s likely that we will go looking towards ¥149 level, and then perhaps the ¥150 level after that. After all, those are areas of interest recently, but it would be very difficult to imagine a scenario where gains hold considering a lot of the fear that is out there currently, and far too many potential problems. I prefer to sell rallies.
GBP/JPY Video 18.06.18
This article was originally posted on FX Empire
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