The British pound rallied a bit against the Japanese yen during the trading session on Thursday, as we continue to chop around that very low levels. The ¥129 level is offering a bit of short-term resistance, so the question now is whether or not we can stay below there? I think we probably do but I also recognize that the ¥130 level is probably much more important, so therefore as long as we stay below that level I think that all you can do is sell this market.
GBP/JPY Video 16.08.19
The 20 day EMA is starting to slope towards the ¥130 level, and I believe at this point it will be yet another reason to be short of this market if we do get near that level. Ultimately, I believe that we are looking at a scenario where there are a lot of global concerns out there, and as this is a risk barometer it makes quite a bit of sense that the markets would continue to favor the Japanese yen. Beyond that, we also have the Brexit to worry about which of course hasn’t gotten any better, so with that being the case it’s essentially a “one-way trade.” That doesn’t mean we can’t rally; it just means that we should be looking to fade those rallies at the first signs of exhaustion. Ultimately, I think that it’s not until we break well above the ¥130 level on a daily close that we can even entertain the idea of the market turning around. Quite frankly, there’s too much negativity out there to think this pair rallies.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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