The British pound continues to grind back and forth in a relatively tight channel, as the ¥155 level continues to be a bit of a magnet for price. At this point, it looks as if the market is trying to turn things around and recapture the ¥155 level. If we can break above there, then it is likely that we could go looking towards the ¥156 level. Underneath, I see a significant amount of support at the ¥153.50 level, so it is not until we break down below there that I would be somewhat concerned. If we did break down below there, then we could open up a move down to the ¥152 level which is an area that features a small gap as well.
GBP/JPY Video 16.06.21
Looking at this chart, to the upside I think that the 156 level could be somewhat resistive but breaking above their opens up the possibility of a move to ¥157.50, and then the ¥160 level after that. We are in an uptrend, so I believe that is the most likely of outcomes, especially if we get more of a “risk on” type of move. That of course will help this pair as it is very sensitive to the risk appetite of traders around the world. Keep in mind that this pair is highly sensitive to risk appetite, and that suggests that if we get more appetite out there, it is likely that we see a dumping of the Japanese yen. After all, that has been the correlation for years, and I do not see that changing anytime soon.
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