The British pound has fallen rather hard against the Japanese yen during trading on Tuesday, as the British continue to go back and forth about the potential of a deal with the European Union. Ultimately, this is a market that I think continues to see a lot of noise, and therefore it’s only a matter time before we get even more negativity. That being said though, the market has rallied a bit later in the day and this could be in reaction to the potential move by the British Parliament to block a “no deal Brexit”, but at the end of the day this is simply more noise in a market that has been nothing but noise.
GBP/JPY Video 04.09.19
To the upside, the ¥130 level continues to offer a lot of resistance, and I think at this point it’s very likely that we will have a lot of selling near that area even if we do rally that far. Alternately, if we break down below the longtail for the daily candle stick, this market also breaks down significantly. At this point, it’s likely that the market could go down to the ¥125 level which seems to be very important based upon longer-term charts and of course will attract a lot of attention just due to the fact that it is a large, round, psychologically significant figure. With that being the case, I believe it’s time to start selling this market every time we bounced and show signs of exhaustion.
Please let us know what you think in the comments below
This article was originally posted on FX Empire