The British pound has gone back and forth during the trading session on Wednesday, as we continue to hang right around the ¥132.50 level. The ¥132 level underneath is a large, round, psychologically significant figure and an area that has been both supportive and resistive as of late. Keep in mind that this pair is extremely sensitive to the risk appetite of markets in general, so it will more than likely follow that overall.
GBP/JPY Video 28.05.20
Furthermore, the British pound is a currency that I do not necessarily trust, because quite frankly there are a lot of economic concerns coming out of Great Britain. There are horrific numbers as far as the pandemic is concerned, and of course the economy is completely shot. Furthermore, there is the sticking point of the Brexit still, so keep in mind that the scenario is not good for the British pound longer-term, and the 50 day EMA sitting just above has been relatively reliable as of late.
I anticipate that the market will continue to be very noisy, but clearly, we are in a downtrend from the longer-term standpoint, so it is simply a matter of waiting to see when it rolls over for us to take advantage of the shorting opportunity. If we can break down below the ¥132 level that will more than likely be the catalyst for further losses. On the other hand, if we break above the ¥133.50 level, extensively the 50 day EMA, then the market is likely to go looking towards the ¥135 level above.
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This article was originally posted on FX Empire