This is a pair that has been parabolic until the last several sessions, so be interesting to see if we work off that parabolic move, or if we turn around and start falling apart. After all, we have gotten a bit ahead of ourselves but at this point in time we are not showing signs of breaking down. If we do pull back, I think the ¥155 level will be an area that will attract a lot of attention, and therefore may have to be paid close attention to. Ultimately, this is a market that I think continues to be very noisy and of course will move based upon the latest either “risk on” move, or the latest freak out.
GBP/JPY Video 12.01.22
Keep in mind that the Japanese yen is considered to be a safety currency, so it does make a certain amount of sense that we would see the Japanese yen strength and if we do get some type of major move in equity markets or the like. That being said, we did see a nice recovery late during the day in America, so that has a little bit of “risk on” flavor out there, which is part of what has lifted this pair. If we were to break above the ¥158.50 level, then we will probably continue to go looking towards the ¥160 level. All things being equal though, I do like the idea of some type of pullback instead of working off the froth, because at least then you can make an argument for value. The last time we behaved like this, we ended up giving up all of the gains, so keep that in mind.
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