The British pound has fallen initially during the trading session on Friday, reaching down to the ¥132 level. By doing so, we found enough support to turn things around and bounce rather significantly. With that in mind, it looks as if this area is going to hold. It was the beginning of an initial surge higher, and now it looks to me as if the buyers are more than willing to step in and protect the British pound. Furthermore, if we get a bit of “risk on” trade, that could send this market higher.
GBP/JPY Video 22.06.20
Remember, the British pound continues to be thrown around by Brexit, and of course the situation in the United Kingdom overall. I think at this point it is likely that the markets are going to look past that, as they have had a remarkable ability to do with most things macroeconomics related. Ultimately, if we do break down below the ¥132 level, it could send this market down to the ¥129 level but considering how quickly we got here, a bounce would make sense regardless. The 50 day EMA above could be significant resistance, so if we were to break above there it would of course be an exceptionally good sign. That needs to be concurrent with major “risk on” around the world though, so keep that in mind. A lot of choppiness is to be expected in this type of environment.
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This article was originally posted on FX Empire
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