The British pound has rallied a bit during the trading session against the Japanese yen on Wednesday but continues to find a lot of interest near the ¥132 level. That is an area that was previous support and should now be resistance. So far, it does seem as if it is going to offer the resistance that one would expect, so therefore selling this pair does seem to be the way to go going forward. The ¥130 level underneath should be supported, and if we can break down below there then the market should go much lower.
GBP/JPY Video 14.05.20
At this point, you should keep in mind that the pair is overly sensitive, especially when it comes to all things risk related. The Japanese yen is considered the safety currency in this pair, so as people become more and more concerned about the global economy, this pair should continue to tumble. To the downside, if we break down below the ¥130 level then it is likely that we go looking towards the ¥127.50 level. The ¥133.50 level above has offered significant resistance as of late, and therefore if we were to break above there then we will probably reach towards the 50 day EMA which is just above there as well. One thing is for sure, the market looks as if it is running out of momentum to the upside in general, so having said that it is likely that the downside is going to be much more preferred.
This article was originally posted on FX Empire