The British pound has dipped a bit lower against the Japanese yen again during the day on Monday to kick off the week but is also fighting support underneath the 50 day EMA. That of course suggests that we are going to have a lot of noise in this general vicinity, but we are below the ¥135 level. This is something that is worth paying attention to, as the large, round, psychologically significant figure in the past has been important, and I would expect that to be the case going forward. Ultimately, I like the idea of fading short-term rallies, unless of course we take out the ¥136 level.
GBP/JPY Video 16.06.20
Ultimately, we are bouncing around between the 50 and the 200 day EMA indicators, which of course makes sense as the market is trying to figure out which direction to go next. If we break down below the lows of the Monday session, we will then more than likely go looking towards the ¥132 level, possibly the ¥130 level.
To the upside, if we were to take out the 200 day EMA, then the market will go looking towards the ¥139 level again. Ultimately though, I do believe that this is a market that probably sees a bit of a pullback in an environment that seems to be finding more and more reasons to be negative. The latest one of course is a surge and coronavirus infections, it people worried about whether or not the infection rate continues to climb, and we get a “second wave.”
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This article was originally posted on FX Empire
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