The British pound has rallied a bit during the trading session on Wednesday, as we continue to see a lot of volatility in this area. The ¥135 level underneath has been massive support, and therefore if we were to break down below there it is likely that this market could start to really pick up a move to the downside and suggest a move to the ¥134 level, followed by the ¥132.50 level.
GBP/JPY Video 17.09.20
Alternately, if we were to break above the 200 day EMA, which is extensively the ¥137 level, the market is likely to go looking towards the ¥138.50 level. After that, we would more than likely be threatening the ¥140 level, which is an area that obviously will attract a lot of attention due to the fact that it was previous resistance and of course it is a large, round, psychologically significant figure.
The biggest problem that we have in this pair is that it is sensitive to risk appetite, which of course is all over the place right now. Under the best of circumstances that could be difficult to deal with. However, the Brexit now is starting to take control of the headlines, and if that is going to be the case the occasional noise coming out of that entire situation could throw this market around quite drastically. The most important thing that you should be paying attention to is your risk parameters, and your position size. It looks like we are grinding back and forth and about a 250 PIP range, so let us see where we break and stick on a daily close before putting money to work.
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