The British pound initially fell during the week but then rallied significantly to show signs of life again. By doing so it’s likely that the market is going to find a little bit of resistance here at the ¥132.50 level but I think there’s even more resistance at the ¥135 level. Beyond that, the 38.2% Fibonacci retracement level sits right at that level as well. Looking for signs of exhaustion, perhaps on the daily chart, is probably the best way to go when it comes time to start selling.
GBP/JPY Video 09.09.19
Keep in mind that this pair is highly sensitive to global risk appetite, which is all over the place right now. At this point in time we have gotten a bit of a reprieve due to the US/China trade situation getting a bit better, as they are meeting in October. At the end of the day though, that is not as big of a factor when it comes to this pair, because we have seen those break down and fail before. There is no reason to think that it’s going to change in the short term. Between that and the Brexit, it’s difficult to own this pair with any type of certainty or conviction to the upside. Looking for signs of exhaustion above, especially at the previous mentioned ¥135 level, seems to be the best way to trade this market as we should see a continuation of what has been a very horrific run to the downside.
This article was originally posted on FX Empire
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