The British pound fell rather hard against the Japanese yen during trading on Thursday as traders are starting to get a bit spooked about several things at one point. However, the Bank of England has suggested that there is further quantitative easing coming, after adding 100 billion British pounds worth of quantitative easing earlier in the session. With that in mind, it should continue to weigh upon the British pound, so I am looking for opportunities to sell this market. If the pair goes below the ¥132 level, then it is highly likely to go looking towards the ¥129 level eventually.
GBP/JPY Video 19.06.20
The 50 day EMA did offer a significant amount of resistance, so if we did rally from here it is likely that we would see sellers in that general vicinity. That being said, the ¥135 level is also significant resistance, and as a result it is likely that we were just waiting for reason to sell off as people worry about the coronavirus situation around the world and the lack of growth anyway. Remember, this is a market that does tend to react to risk appetite in general, and we have plenty of reasons to cause issues.
This issue should continue to have people running towards the Japanese yen, but this is more or less a British pound situation for the session. Nonetheless, there are plenty of reasons to think that perhaps we will enter a new phase of “risk off” going forward. Because of this, perhaps we are seeing a change yet again. However, one thing is for certain, every time there is a new headline there is a new move.
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This article was originally posted on FX Empire