Yahoo Finance GBP/JPY Price Forecast – British Pound Breaks Down Again
The British pound initially rallied during the trading session on Monday, but then plunged into the ¥130 level. This is an area that should be supportive but considering that markets are trading on technicals at this point, it’s about the global fear index. At this point, we are probably due for some type of bounce, but that bounce should be sold into. I have a hard time believing that suddenly everything will change, as the financial destruction continues. As an example, the US futures for stock markets all went limit down, and that’s generally a sign that the “risk off trade” is still in effect.
GBP/JPY Video 17.03.20
Ultimately, this is a pair that is highly sensitive to risk appetite so you should be aware the fact that it will go back and forth based upon the latest headlines. While the ¥130 level should cause a certain amount of support, the reality is that the next headline could be the one that sends the pair right through it. The best way to play this pair in this environment is selling signs of exhaustion, after short-term bounces. We will eventually get some type of “rip your face off rally”, just as we have seen in stock markets occasionally, but always seem to get hammered just as quickly. With that in mind, I don’t like the idea of messing about trying to get cute with this, and simply looking for selling opportunities as we are obviously in a very negative mode. With this, expect a lot of volatility.
This article was originally posted on FX Empire
