The British pound went back and forth during the trading session on Thursday as we are trying to find some type of direction when it comes to risk appetite. Having said that, the 200 day EMA sits right in the middle of the range and it suggests that perhaps we are trying to figure out what to do next. If we can break above the recent range, then I think the market goes looking towards the ¥140 level. On the other hand, the market was to break down below the lows of the last couple of days, it’s likely that the market will go looking towards the ¥135 level.
GBP/JPY Video 06.03.20
Looking at this and noisy reaction to the 200 day EMA, it’s very likely that we are going to make a serious decision rather soon. That being said, if the market does break down below the lows, I think that shows more of a “risk off” attitude to the markets which is very possible considering all of the noise in nonsense that we have seen. Having said that though, we are also sitting on top of the 50% Fibonacci retracement level, so that of course could come into play as well. If we can break above the ¥140 level on a bounce that would be a very strong signal to the upside. If the market was to break down below the ¥135 level it would clear the 61.8% Fibonacci retracement level which is also a very negative sign and could accelerate selling. This is probably going to be a very wild couple of sessions.