The British pound has gone back and forth during the week, showing the ¥140 level as major importance in the market, and if we can break above there it could free the British pound to continue going much higher, perhaps to the ¥148 level. That being said, this is a market that is very volatile and will continue to be at the mercy of not only Brexit headlines, but the US/China trade headlines as well, as this pair is highly sensitive to risk appetite around the world.
GBP/JPY Video 11.11.19
Ultimately, this is a market that has rallied far too far to continue going higher without some type of consolidation. We have that now, so it’s only a matter of time before we do rally, because quite frankly we are getting very close to more “risk on” type of situation. The 50 week EMA is underneath and starting to curl higher, so that should help as well. Ultimately, this is a market that is also testing the 61.8% Fibonacci retracement level at the same level, so it makes sense that we will see a move sooner rather than later. Ultimately, if the market was to make a significant move it should bring fresh money into the market, especially if it’s to the upside as the British pound is historically cheap after the Brexit vote, and at this point Armageddon has been price then. At this point, it’s very likely that value hunters will continue to try to build a bit of a base as headlines are getting slightly better.
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This article was originally posted on FX Empire
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