The British pound has rallied a bit during the course of the trading session on Friday, as we continue to try to get towards the top of the shooting star from Thursday. The shooting star from Thursday of course shows a lot of resistance, and at this point in time we need to break above it in order for the buyers takeover. Keep in mind that the markets are highly sensitive to risk appetite in general, so keep in mind that the Japanese yen is still thought of as a “safety currency.”
GBP/JPY Video 02.08.21
If we break down below the ¥152.50 level, it is likely that we could reach a little bit lower, perhaps heading towards the ¥150 level over the longer term. If we get down there, then obviously it will be a major negative move and probably would follow right along with other risky assets so it should be a move that a lot of people will notice right away. On the other hand, if we do continue to see more upward pressure, then it is likely that we will see a lot of risk being taken in multiple markets, especially in places like indices, as well as some of the highflying currency pairs.
Pay attention to the British pound against the US dollar, because it can give you an idea as to where the British pound goes against almost everything, including the Japanese yen. All things being equal, we are facing a significant barrier above, so breaking through it of course opens up a pretty big move.
For a look at all of today’s economic events, check out our economic calendar.