The British pound has bounced significantly against the Japanese yen during the trading session on Friday, showing signs of recovery, as the markets had been so oversold for so long. At this point in time I believe that the market participants will continue to sell rallies though, and I would be especially interested near the ¥137 level as there is that gap there. However, we may find ¥134 to be a bit too much as well. Keep in mind that there will be a lot of risk out there and the announcement coming out over the weekend from various countries will of course have a major influence on what happens next as well.
GBP/JPY Video 16.03.20
I still like the idea of fading rallies, at least until something substantially changes. People are still trading more or less on fear than anything else, and that of course will have a major influence on this pair which is so risk appetite sensitive. Ultimately, this is a market that I think still needs to reach down towards the ¥130 level before it’s all said and done. That being said though, is very likely that we will see a lot of volatility regardless of what direction the move is. At this point in time, keeping your position size relatively small is probably the best thing that you can do as the volatility is much higher than usual.