The British pound try to rally during the trading session on Wednesday but has failed significantly. At this point, the shooting star of course tried to be formed is a very negative sign for the short term uptrend. All things been equal though, this is the parabolic move so quite frankly it was never going to go on forever. Also, you have to keep in mind that the Brexit continues to be a major issue, so at this point it’s very difficult to get overly bullish of the British pound. Quite frankly, I think that the market is ready to roll over given enough time, and a break down through the 50 day EMA it could signal fresh money coming to short this market.
GBP/JPY Video 11.09.19
It’s very likely that we are going to see a return to the ¥130 level sooner rather than later, because quite frankly all it would take is some type of negative headline involving the Brexit to send this pair back down. Beyond all of that, it is highly sensitive to overall risk appetite around the world, which seems to be running out of steam as well. The Japanese yen is considered to be the “ultimate safety currency”, so you should of course pay attention to that dynamic. All of that being said though, there is a significant amount of support underneath so this is going to take some type of external shock to send this market down the way I believe will happen given enough time.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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