The British pound has rallied during the bulk of the week against the Japanese yen in a relatively positive week. Ultimately though, we have a lot of resistance above so that is something to pay attention to. With that in mind the idea is that we could continue to go higher but at this point there is a lot of potential headlines out there that could move markets in either direction. Remember, this pair is sensitive to risk appetite but what I would point out is that the previous week formed an inverted hammer. We have since broken above the top of that candlestick, so this shows resiliency in this pair.
GBP/JPY Video 06.07.20
The British pound is a bit of a mess right now and quite frankly I do not like trading it. However, it is worth noting that eventually we will get a big move, that is what this pair does. The volatility in this pair is quite well-known, so do not be surprised at all to see this chop around in the short term. Ultimately though, we are grinding lower over the longer term so it will be interesting to see whether or not we can actually rally from here. If we do, I believe that the ¥140 level will be about as high as we can get.
What I see to the downside is supported at the ¥129 level, so if that gets broken, we could have the “bottom fallout” in this market. Keep in mind that there are plenty of headlines out there that could move this market but right now it looks as if it is trying to turn around a bit and perhaps go looking towards that 50 week EMA.
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This article was originally posted on FX Empire
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