The British pound has continued to be very volatile with an upward slant during the trading session on Monday as traders continue to hope that the United Kingdom won’t leave the European Union. At this point, it seems very unlikely that the uptrend can continue though, because quite frankly there are so many problems out there that can continue to cause more of a “risk off” attitude. Ultimately, this is a market that is in a major downtrend and is probably going to find a lot of resistance at the ¥135 level. With that being the case I suspect that it’s only a matter of time before we push back down, but the short term outlook is perhaps a bit of short-term covering, because we can’t read what’s going to happen next when it comes to the United Kingdom leaving the European Union.
GBP/JPY Video 10.09.19
All things being equal, it’s likely that the market participants will continue to be a bit cautious and certainly massive skittishness will be a major problem with this market as there are so many potential landmines that it’s difficult to be comfortable holding. With that, I anticipate that the market may be able to grind higher, but it certainly going to take the elevator down. I’m looking for signs of exhaustion above to take advantage of, so that I can continue the longer-term trade. I do think that we break the lows again, but we need some type of catalyst to make that happen. It might be the Brexit, it might be the US/China trade situation, or for that matter it could be some other unforeseen geopolitical issue.
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This article was originally posted on FX Empire
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