The British pound has gone back and forth during the course of the trading session on Wednesday as we are hanging about the ¥157 level. This market continues to be a bit parabolic, so at this point in time I would hope to see some type of pullback to reach towards support or at the very least sanity. The ¥155 level is an area I would love to see this market pullback towards, but right now it does not show much in the way of wanting to do so.
GBP/JPY Video 06.01.22
Above, the ¥158 level has been resistance previously, which was during the most recent highs from the previous parabolic move. That being said, the real question now is going to be “Will we have a repeat of the last time we did this?” It is because of this that I am cautious, and I certainly would not be chasing the trade all the way up here, because quite frankly that is a great way to lose money. The risk to reward ratio is so skewed in the favor of losing that you cannot chase.
Keep in mind that this pair is highly sensitive to risk appetite and of course you need to pay attention to other markets to give you an idea as to where we are going to go here. The more general risk appetite out there, the more likely we would see this market rally. That being said, it is worth noting that this market has gone straight up in the air while most indices have been positive yet somewhat muted.
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