The British pound went back and forth during the trading session against the Japanese yen on Tuesday as we see a lot of support at the ¥132 level. Breaking down below that level, the market could go down to the ¥129 level at the recent bottom. If we were to rally at this point, then the market will probably see plenty of resistance at the 50 day EMA. At this point in time, I think that it is only a matter of time before the market get some type of catalyst to move risk appetite in one way or another.
GBP/JPY Video 01.07.20
This is a market that will move to the upside with more of a “risk on” type of situation, just as the pair falling apart will then signal that we are more of a “risk off” market. I do think that market participants will continue to look at the Japanese yen as a safety currency, especially against the British pound as the market is starting to look at the United Kingdom and the Brexit situation as something that could continue to cause major issues.
With that being the case, I think that rallies will continue to be sold into, and that is essentially the best way to look at this market. If we were to break above the 50 day EMA, then the market will probably go looking towards the ¥135 level, which is an area that has caused both support and resistance in the past. Ultimately, this is a market that is going to move with the latest headlines.
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This article was originally posted on FX Empire
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