The British pound has rallied against the Japanese yen during the trading session on Friday to reach towards the ¥152.50 level. There is a significant barrier that extends all the way to the ¥153 level, so it will be interesting to see whether or not we can break out. If we do, then this will be an extraordinarily bullish sign for this pair, and it is almost certain that we would go looking towards ¥155 level.
GBP/JPY Video 13.09.21
However, if we pull back then we may have to re-consolidate in what has been a very sleepy market as of late. We have yet to make a “higher high” in this market, and therefore should keep in mind that the markets will continue to look at this through the prism of “risk on/risk off.” As long as we are in a relatively decent frame of mind from a risk appetite standpoint, this is a pair that will do well. However, if there is some sudden concern out there, then this pair would almost certainly get sold off rather drastically. Keep in mind that this is a pair that does move rather quickly, so you need to be cautious with your position size but understand that once the trade works out in your favor, you should start to add as the prophets can build up rather quickly.
The Japanese yen is considered to be one of the premier safety currencies, so that of course is something that you should pay attention to as well. That being said, if we see a sudden selloff in stock markets or the like, then you probably need to get short of this pair or at least not be long.
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