The British pound has initially tried to rally during the trading session on Friday, but then turned around to show signs of weakness. This is a market that is currently pressing against significant resistance, right along with the GBP/USD. At this point we are trying to figure out whether or not the British pound can keep up the bullish pressure that we had seen for some time. Ultimately, this is a market that I think continues to fade rallies but if we do to break above the ¥135 level, it’s likely that the market can pop towards the ¥137 level.
GBP/JPY Video 06.04.20
To the downside, if the market was to break down below the ¥132.50 level, it’s likely that the British pound will go looking towards the ¥130 level. What’s also causing some issues just above is the 50% Fibonacci retracement level. That of course will attract a lot of attention, and as a result it’s not a huge surprise that we have sold off from there. With the global economy slowing down it makes sense that the safety trade continues to be the way where money flows. Rallies at this point of fading until we get a daily close above the ¥135 level. If we do, then I believe that the buyers will start to push this market much higher. In the meantime, I suspect a lot of choppy and back and forth trading more than anything else. Keep your position size relatively small but perhaps a little bigger to the downside as it goes with the overall trend.
This article was originally posted on FX Empire
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