The British pound initially tried to rally during the trading session on Thursday but has run into the same resistance that we found during the previous session near the ¥142.50 level. Look at this chart, you can see that we are trying to form another shooting star, just as we had during the previous session. If we do get that candlestick, it is likely that the market should pull back to look for support underneath near the ¥140 level. That is an area that will of course attract a certain amount of attention, not only due to the fact that it is a large, round, psychologically significant figure, but it is also an area where we have seen structural resistance previously. The 50 day EMA is starting to reach towards that level as well, so all things being equal I think that is an area that will cause a certain amount of noise.
GBP/JPY Video 15.01.21
To the upside, if we can break above these couple of candlesticks over the last 48 hours, the market probably goes looking towards the ¥145 level. That is an area that would of course cause a significant amount of interest as well, due to the fact that it is a large figure, but also when you look at historical charts, you can see that the market has reacted there previously. Keep in mind that this pair is highly sensitive to risk appetite, so that of course is worth paying attention to as well. Ultimately, this is a market that will continue to be very noisy, so you need to keep your position size rather reasonable in these volatile times.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire