The British pound has gapped lower to kick off the trading session on Monday, as people worried about the tariff or heating up even further. The Chinese initially said they would not be retaliating to the tariffs that the Americans were set to put on over the weekend, and then immediately did so after those came into effect. This of course has people concerned that things are getting uglier, and they most certainly are. With that, the Japanese yen gets a bit of a bid, and with the British pound being on the other side of the trade, this could be the easiest place to start shorting.
GBP/JPY Video 03.09.19
The British pound continues to suffer at the hands of a very sloppy and uncertain Brexit, which is only getting worse. The deadline for the United Kingdom to leave the European Union is October 31, and that is coming very quickly. There seems to be no end in sight when it comes to the messiness, so I believe that as the British pound rallies, you should start looking to sell, not only in this market but anything that has the letters “GBP” attached to it.
To the downside, I think that we are going to go down towards the ¥127 level initially, but I also believe that it’s only a matter time before we break down below that low and go looking towards the ¥125 level after that. In fact, you can probably say that we just broke down through a rising wedge, which of course is bearish and should have us looking for the lows.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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