The British pound has initially sold off during the trading session on Wednesday to reach down towards the ¥155.50 level, before turning around and showing signs of life again. Ultimately, this is a market that I think is trying to find its footing and if risk appetite picks up a bit, that could help it happen as well. As long as we can stay above the ¥155 level, it is very likely that this market will continue to find buyers on every short-term debt.
GBP/JPY Video 20.01.22
To the upside, the ¥157.50 level more than likely will be resistance, and of course the target. That being said, I would anticipate seeing a lot of noisy behavior, which is typical for this pair anyway. Keep in mind that this market has gone parabolic recently, so a little bit of working off of the froth makes quite a bit of sense. On the other hand, if we were to break down below the ¥155 level, it could be a very negative turn of events, probably tied together with the idea of a general “risk off” market in general.
Any break down below there could open up a move towards the ¥152.50 level, and then possibly the ¥150 level after that. Keep in mind that the market recently went parabolic and then did exactly that. Because of this, is very possible that we could continue to see a huge and volatile range, but obviously we would need to see some type of catalyst. At this point, it looks like the British pound continues to be very strong in general, so I think that will continue to be the case here as well.
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