The British pound has rallied quite significantly during the trading session on Monday as it seems to be more of a “risk on move” around the markets. Because of this, I think that we may have a little further to go but at the end of the day the market still had been falling apart, and with that being the case I think it is very likely that we will see sellers sooner or later. At this point, I think it is much easier to wait for signs of exhaustion, but you could make a serious argument for a bit of a “hard floor” near the ¥150 level.
GBP/JPY Video 24.08.21
The size of the candlestick is rather important, but at this point it looks like the ¥152.50 level above could be an area that the market goes looking towards, but we have seen a lot of selling from that area. Furthermore, we have the issue with a lot of concern around the world when it comes to the reopening trade, and that of course will have a lot to do with what the overall markets do, including this one which of course is very sensitive to risk appetite.
If we do break above the most recent high, then we could go looking towards the ¥155 level. On the other hand, if we were to turn on a breakdown below the lows of the trading session on Monday, then it is likely that we will finally get that breakdown below the massive support that has kept this market somewhat supported. At that point, I would anticipate that the market goes looking towards the ¥145 level, possibly even the ¥140 level.
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