The British pound has drifted a bit lower during the course of the trading session on Monday, reaching down towards the ¥150.50 level. That is an area that has been supportive multiple times, and quite frankly if we can break down below the lows of the trading session on Monday, it is likely that we will continue to fall towards the ¥150 level. It should be noted that we have turned around to show signs of life and stability in the middle of the day, but quite frankly this is a market that I think is most certainly going to move right along the lines with risk appetite, as the Japanese yen is considered to be a “safety currency.”
GBP/JPY Video 17.08.21
One thing that is worth noting is that we recently had a nice bounce from the ¥150 level but have essentially gone sideways more than anything else over the last couple of weeks, in a bid to stabilize more than anything else. I suspect that we are either going to continue this short-term range bound trading or break back down. However, if we were to break above the ¥153.50 level, that could open up the possibility towards the ¥155 level. In general, this is a market that I think will continue to be very noisy, but the consolidation argument can be made simply because it is August, and it does end up being a relatively quiet month most of the time. With this, it is likely that we will continue to see choppy behavior more than anything else, and therefore position sizing will be crucial.
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