The British pound broke down during the trading session on Thursday, as we continue to see a lot of fear out there. Ultimately, the market looks as if it is going to reach down towards the ¥130 level, an area that is technically important from a large, round, psychologically significant figure aspect. Ultimately, I think that the market is probably going to continue to see a lot of volatility and quite frankly I think we probably have further to go. The ¥127 level underneath is the 100% Fibonacci retracement level, so it is possible that we see a move down to that level. Either way, I do think somewhere between ¥127 and ¥130 will offer a bit of support.
GBP/JPY Video 13.03.20
At this point, the market is likely to see a lot of volatility, but eventually we will get a huge bounce. I don’t think we are quite there yet, perhaps maybe a few days away from that ability. That being said, if the market was to break down below the ¥127 level, then the market opens up down to the ¥125 handle underneath. All things being equal, this is a market that I think continues to see a lot of trouble, because quite frankly we still have to work through the whole Brexit thing on top of this global fear anyway. The Bank of England just cut interest rates by 50 basis points, which of course brought down the value of the British pound but quite frankly it’s all about global fear right now more than anything else when it comes to this pair.