The British pound has fallen rather hard against the Japanese yen during the trading session on Friday, as we have broken down towards the ¥155.50 level at the time of writing. Breaking out of that consolidation way up high makes a certain amount of sense, but the question is whether or not this is going to be a short-term pullback, or if it will lead to something bigger? At this point, it is probably too early to tell, so I will be paying special attention to the ¥155 level, as it is a place where we should see a certain amount of support and of course value hunting. If we do not see it there, then I think we could very well repeat the move that we had after the attempt to get parabolic last time.
GBP/JPY Video 17.01.22
If we do bounce from the ¥155 level, then it is probably only a matter of time before we turn around and try to reach to the upside. That being said, I do not expect an easy bounce from this area. It will come down to whether or not risk appetite can pick back up, as it is a big deal as to where we go next. Ultimately, this is a market that I think continues to see a lot of volatility, so you need to be very cautious about the amount of money that you are trading. Quite frankly, this is a market that will continue to be very noisy so therefore safety is your first concern when it comes to this market. This is all about risk appetite, which is currently crumbling as I record this.
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