The British pound has gotten hit rather hard against the Japanese yen, as a decidedly “risk off” marketplace has shown itself. At this point in time, it’s obvious that the markets are rattled by the coronavirus epidemic and now we have to worry about a price war in the oil markets when Saudi Arabia has announced that they were going to increase production to trying to crush competitors. That there is a serious lack of demand for crude oil, so that’s going to be interesting to watch but clearly global markets are in serious trouble as this pair has completely fallen out of bed.
GBP/JPY Video 10.03.20
Just above, you can see that the 200 day EMA was offering a bit of support but has been gapped through so at this point in time it’s very unlikely that we can recover and any move towards that area will probably be sold into. To the downside, a break below the bottom of the range for the day opens up the possibility of a move down to the ¥130 level. Quite frankly, this has a lot less to do with the British pound that it does people running towards the Japanese yen. However, one would have to think that sooner or later the Bank of Japan would get involved. In the short term, I believe that selling rallies will probably be the best way to deal with this situation, perhaps focusing more on short-term charts to take advantage of exhaustion when it occurs.