The British pound fell rather significantly early in the session but bounced quite drastically as Bank of England member Saunders suggested that there could be interest-rate hikes due to inflation. That being said, the market is likely to continue to see a lot of noisy behavior, as we are trying to figure out what is going on with risk appetite in general. That being said, the market is likely to see a lot of choppy behavior, but it does look like we continue to drift lower.
GBP/JPY Video 16.07.21
Looking at this chart, it looks as if we will eventually try to go finding the ¥150 level underneath, which is a previous level of importance. There has been a lot of noisy behavior and downward pressure for a while, and I think that once we get past the initial shock of the statement, we will probably continue to look at the overall risk appetite and wonder whether or not this pair can continue to go higher? In general, I still think that we will see sellers coming in every time we see signs of exhaustion, as the market simply does not seem to be willing to take a lot of risk in general right now.
With that being the case, the market is probably one that we need to pay close attention to position size more than anything else. To the upside, we need to get past the ¥153.50 level to consider going long at this point in time. That being said though, expect a lot of whipsawed type of trading that will be difficult to get your hands on.
For a look at all of today’s economic events, check out our economic calendar.