The British pound went back and forth against the Japanese yen during the trading session on Tuesday, as it looks to be showing signs of stability. That’s a good thing, and something that could lead to a bit of a bounce. Having said that, this is going to be a great selling opportunity at the first signs of a rally. Because of this I will be looking for opportunities to short this pair closer to the ¥129 level, extending all the way to at least the ¥130 level. Beyond that, we also have the 20 day EMA reaching down towards that level, which makes for an interesting confluence of technical indications.
GBP/JPY Video 14.08.19
To the downside, I believe that the market is going to go looking towards the ¥125 level, as it is a large, round, psychologically significant figure as well as an area that has previously been both supportive and resistive in the past. All things being equal, keep in mind that this market is highly sensitive to risk appetite, so therefore we need to pay attention to the overall attitude of the markets and then trade this pair accordingly. If we continue to see global concerns, which of course we probably will, then this market should continue to see people running to the Japanese yen for safety. Ultimately, I’m a seller so even though I think that we are likely to get a little bit of a pop from here, I will be looking to fade it at the first signs of exhaustion.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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