The British pound has rallied a bit during the course of the trading session on Wednesday to break above the crucial ¥152.50 level, an area that has been important more than once. That being said, I think that the market has a lot of noise just above that could come into the picture, so I would anticipate more choppy behavior, and the occasional pullback makes quite a bit of sense. If we break down below the hammer from the trading session on Tuesday, then it is possible that we roll over and go looking towards the ¥150 level.
GBP/JPY Video 29.07.21
Looking at this chart, you should also keep in mind that it has a lot to do with risk appetite, so keep that in mind. It tends to rise right along with that risk appetite and fall if it struggles. I think the next couple of days could be crucial for risk appetite in general, so that of course will have a huge influence on where we go next. All things been equal, we are essentially in the middle of the larger consolidation area, and that means that we could go either way at this point. Nonetheless, it should be noted that the British pound has recovered quite nicely from the previous selloff, so it will be interesting to see how this plays out.
As we continue to go through the quiet part of the summer, it is likely that we stay within the range of ¥150 underneath and ¥155 above. With that being the case, I think we are looking at a scenario where we just do not really have longer-term directionality right now.
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