The British pound initially tried to rally during the course of the trading session on Friday but gave back the gains as we reached towards the ¥150 level. At this point, it looks like the market is going to continue to struggle, and quite frankly we are getting dangerously close to kicking off a major move lower. If we break down below the ¥149 level, it is very possible that we will go looking towards ¥145 underneath.
GBP/JPY Video 26.04.21
On the other hand, if we were to turn around and retake the ¥150 level, then we probably go looking towards the ¥151.50 level. That is very possible, especially considering that we are in the midst of a major uptrend, but it is clear that some things going on that people need to pay close attention to. Clearly there is a serious question about risk appetite suddenly, as things may have gotten too far ahead of themselves.
There are a lot of different things that could be causing this, not the least of which would be higher coronavirus rates in places like Japan and India. If Asia starts the lock down again, and there are already signs that Tokyo is going to, that could lead to another negative twist in the markets globally. That being said, we need to be very cautious about putting a lot of money towards risk appetite based pairs like this. Furthermore, the Japanese yen itself was picking up strength overall, so that obviously would have its knock on effect here as well.
For a look at all of today’s economic events, check out our economic calendar.