The British pound has broken down significantly during the trading session on Monday as traders came back to work, but we are starting to dance around the 200 day EMA, an area that will attract a lot of attention by traders around the world. That being the case, this is a market that could get a bit of a bounce but there are a lot of other things going on right now simply to throw the market back and forth. The Bank of England has suggested that perhaps they are willing to step in and cut rates if necessary, so therefore it makes sense that the British pound has taken a bit of a hit.
GBP/JPY Video 03.03.20
The market bouncing from here could see the pair going as high as ¥140, but if we break down below the bottom of the candlestick for the Monday session, the market is more than likely going to go looking towards the ¥135 level. At this point, markets are not trading so much on technicals or fundamentals, rather panic. So to be honest the most important thing you can do is to cut your position size down regardless, because what we are seeing is a bit of a “rolling selloff” meaning that traders are crushing one market after another going back and forth from one pair to another commodity to another index, and so on. More than likely, we will continue to see bearish pressure, but we need to clear this 200 day EMA to get that technical barrier out of the way.