The British pound went back and forth during the course of the trading session on Wednesday, as we have continued to try to get a bit of a grasp on the idea of going higher. The ¥152.50 level has been massive resistance, so if we could break above there then we can challenge the ¥153 level, where we had sold from previously. When I look at the longer-term chart, it is hard not to notice that we have a little bit of a complex head and shoulders, so that is something to be very well aware of from a longer-term standpoint.
GBP/JPY Video 09.09.21
If we can make a fresh “higher high”, then I think that kills off the idea of the complex head and shoulders, but if we were to turn around a break down below the ¥149 level, that could signify a massive selloff going forward. That obviously is not going to happen very easily, and I do not expect that to happen in the next 24 hours. However, when I look at this chart that is something that I always have in the back my mind.
Keep in mind that this pair is highly sensitive to risk appetite, and therefore you need to pay attention to how the stock markets overall are doing. In a scenario where everything start selling off, this pair will do the same thing. On the other hand, if we start to see a lot of risk appetite out there willing to take advantage of the market, then this pair should rally rather significantly. In general, I think this continues to be very difficult in the short term, but eventually we will get a bit of clarity.
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