The British pound has fallen hard during the trading session on Thursday to reach down towards the ¥150 level. This is an area that would of course attract a lot of attention, as it is a large, round, psychologically significant figure, and an area where we have seen quite a bit of strength previously. We had formed a hammer just below this level from several weeks ago, and therefore it is likely that we would see plenty of support in this region. In fact, we have already started to bounce just a bit, so it makes quite a bit of sense that we would see a bit of a fight.
GBP/JPY Video 20.08.21
That being said, it certainly looks as if we are slumping along, and it looks like we will continue to see more downward pressure over the longer term. After all, the market is very sensitive to risk appetite. The Japanese yen is of course considered to be a major safety currency, so if we get more fear jumping into the market, that should send this market much lower. If we break down below the hammer from several weeks ago, the market is likely to go looking towards the ¥145 level, possibly as low as the ¥140 level, although that obviously would be a longer-term call more than anything else.
As far as buying is concerned, we would need to take out the last couple of candlesticks in order to make a short-term trade towards the ¥152.50 level. That is an area that I think will show a certain amount of resistance, as we have sold off from there quite recently.
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