The British pound broke down during the trading session on Tuesday, as we continue to rollover every time we get close to the ¥130 level. Ultimately, this is a market that I think will continue to go even lower, down to the ¥125 level underneath. At this point, the market is a bit oversold so I think what we are looking at is a market that is going to try to come to grips with the idea of a “no deal Brexit”, and therefore I think we have much further to go to the downside. All things being equal though, we are overdone so I don’t know that we are going to see this market break down in the short term.
GBP/JPY Video 21.08.19
Ultimately, rallies are to be sold and I think we are starting to see a bit of a buildup to the downside. If we do break above the ¥130 level, it’s likely that we will go looking towards the red 50 day EMA above. That being said, I’d be surprised to see if we can break out at this point. Ultimately, it’s not until we get the final “flush lower” that I’d be a buyer. Looking at this chart, although we are overdone it’s very unlikely that we will see any strength to the upside. At this point, the market is one that can’t get out of its own way, so look to short-term charts to take advantage of the longer-term trend.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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