The British pound has gone back and forth around the ¥132 level against the Japanese yen during trading on Thursday, as we got a slew of economic numbers out of the United States, none of which of course were good. That being said, Wall Street celebrates these poor numbers as it has for a while, driving stocks higher. This has kept risk sensitive pair is a bit levitated, and that is part of what we have seen here.
That is a bit of a conundrum for markets, because some people are paying attention to the potential opening up of economies and therefore the “risk on trade”, while other people are focusing on the fact that the future may not be as bright as those other people think. At this point, if the market breaks down below the lows of the trading session on Thursday it is highly likely to go looking towards ¥131, and then eventually the ¥130 level.
GBP/JPY Video 29.05.20
To the upside, the 50 day EMA will more than likely cause a lot of resistance so as long as we can stay below that read moving average on the daily chart, I do believe that there are plenty of sellers out there willing to push to the downside. The Japanese yen of course is a safety currency and that helps, especially considering that we not only have poor economic numbers, but we also have the US/China trade situation deteriorating yet again, which of course will be good for risk appetite worldwide. At this point, the trend is still lower, so that is how we have to look at this.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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