The British pound had gapped a little bit lower but turned around to shoot straight up in the air initially during the day on Friday. After that, they have sold this thing off to make it reach towards the ¥155 level again. If we can break down below the ¥155 level, that is very likely that this market will then start to unwind quite drastically, which is something that I think is desperately needed considering how ridiculous this move has been. A lot of it probably had to do with the lack of liquidity but when you look at the overall attitude of this pair for the last several months, it has been nothing but violent swings back and forth.
GBP/JPY Video 03.01.22
The 50 day EMA is all the way down at the ¥152.50 level and is curling higher. I think at the very least we could see a move towards that area assuming that we do get that breakdown. On the other hand, if we continue to see this parabolic move happen, then the market could go looking towards the ¥157 level. Market participants will continue to be very erratic but keep in mind that this pair is highly sensitive to risk appetite and therefore you have to pay attention to how that is going to get a feed on what may happen here. Ultimately, this is a market that will eventually have to stabilize, but if there is one thing you can take a look at this chart and deduce in the meantime, is that we are most certainly overbought at this point.
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