The British pound fell during the trading session on Friday to break down below the ¥151 level and threaten the idea of reaching down towards the ¥150 level underneath. The ¥150 level of course would be a large, round, psychologically significant figure, especially supported by the massive hammer that had sent the market back to the upside. Ultimately, if the market was to go below there, then it is likely that the market will continue to drip much lower, perhaps reaching towards the ¥145 level, possibly even as low as the ¥140 level underneath there. After all, the market has been “slumping” for a while, and now that we are starting to see more of a risk off type of move, I think we could see this market accelerates to the downside if we break through that hammer.
GBP/JPY Video 18.08.21
To the upside, we could get a bit of a bounce, but it looks like the ¥152.50 level will continue to offer resistance above, so I do not necessarily think we get above there without some type of major turnaround. This would have to be a significant move that we would see across-the-board, not just here. We would need to see stock markets recover from the selloff that we had seen early in the day. Furthermore, you have to keep in mind that New Zealand has just locked itself back down due to a single case, and of course China continues to lock itself down as well. With that being the case, it looks like economic activity could be slowing down, and as markets are a forward-looking, they are starting to try to price the same.
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