The British pound rallied significantly during the week, but then gave back the gains rather quickly at the ¥132 level. The weekly chart looks very noisy down here, as we are at extreme lows. Ultimately, this is a market that is going to continue to see noise due to the fact that the area just below the ¥129 level has been fought over so drastically. I believe at this point it is likely we will continue to see traders try to build up a little bit of momentum in this area, but if we were to break down below it is likely that we will then flush lower, perhaps all the way down to the ¥125 level.
GBP/JPY Video 25.05.20
To the upside, if we can take out the ¥132 level it is likely that we could go looking towards ¥135 level where I would see even more resistance and would be much more willing to start shorting. With all of this noise, it is difficult to trade from a longer-term charts, but one would have to favor the downside in general due to the fact that the risk appetite out there should continue to cause issues. At this point, fading rallies should continue to offer opportunities, and therefore it is likely that we will see selling pressure every time it gets ahead of itself. Ultimately though, longer-term traders are probably better served looking at shorter-term charts when it comes to trading this particular pair and in this particular environment.
This article was originally posted on FX Empire