The British pound fell a bit during the trading session on Wednesday but remains a bit resilient as you can see. The uptrend line has held, and at this point you can see that we are forming a bit of a rising wedge, which of course is a very sign. Ultimately, I do think that this pair breaks down due to the Brexit and the lack of clarity. The British pound of course has been suffering due to the Brexit, so it makes quite a bit of sense that the British pound falls in general.
GBP/JPY Video 29.08.19
If we break down through the rising wedge, it opens up the door to the ¥126 level. Even if we were to break out to the upside, at this point the 50 day EMA would be your next bogey to worry about. Beyond that we also have a significant amount of choppiness right around that level as well. Even if we were to break above there, then you have to worry about the ¥135 level. It’s not until we break above that level that we can make an argument for a trend change. At this point, the Brexit continues to struggle to go along, so therefore it makes sense that we fall. Beyond that, the Japanese yen is a safety currency, so this is a bit of a “perfect storm” when it comes to hiding from trouble. At this point, it’s very likely that we continue to drift lower. Headlines will continue to work against this market in general.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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