The British pound has shot higher during the trading session on Monday, to reach back into the previous consolidation area that had been so important over the last couple of weeks. That being said, the market has given back quite a bit of those gains to show a less than impressive candlestick. Nonetheless, this is a market that you cannot short anytime soon because quite frankly it has been so strong over the last several weeks. I believe that the ¥155 level underneath will continue to be important, so pay close attention to that area. If we reach back to push that area, it could give us a bit of a heads up as to where we are going next.
GBP/JPY Video 18.01.22
The British pound against the Japanese yen is a highly sensitive pair when it comes to risk appetite, so you need to pay close attention to what is going on around the world. Ultimately, this is a market that I do think eventually will find enough momentum to make some type of decision, but right now it is obvious that we just do not know what to do. If we were to break down below the ¥155 level, that can send this pair much lower, but until we smash through that level, I think that we have a situation where you have to look it dips as potential buying opportunities, assuming that the other markets around the world are doing fairly well. Keep in mind that we recently tested the ¥158.50 level, so that is an area worth paying close attention to.
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