The British pound initially tried to rally during the trading session on Wednesday but gave back the gains to fall below the 140 young level. By doing so, we are reaching the ¥139.50 level. That’s an area that has been supportive, and if we break down below there I think it opens the door to the ¥138 level. Ultimately, this is a market that continues to go back and forth but I think it certainly has more of a negative vibe.
GBP/JPY Video 23.05.19
The candle stick for the day so far has been rather negative, so I do think that it’s only a matter time before the market breaks down. At that point, I would anticipate that the market looks at the ¥138 level as mentioned previously, mainly because of the 61.8% Fibonacci retracement level. If we break down below there, it’s likely that we wipe out the entire move to the upside. Ultimately, expect a lot of noise in this pair but it certainly looks as if lower pricing is likely.
If the global macro situation gets worse, that will also put heavy pressure on this pair. At this point in time, it’s very likely that the sellers will continue to run this market but if we do get a sudden turn around and the British pound situation, especially when it comes to the Brexit, this pair could act like it has rocket fuel as it will not only be good for the British pound itself, but also for overall markets. If that’s going to be the case, it’s likely that it will be a “double whammy” for the buyers.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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