The British pound initially tried to rally during the trading session on Monday, but then pulled back a bit in a little bit of a “risk off” type of move. Ultimately though, the 50 day EMA is in the middle of the consolidation area, and therefore should be thought of as the median price of the market is trying to coalesce around. Having said that, the market breaks above the highs of the last three candlesticks, then we could go looking towards the ¥145 level. Underneath, I anticipate that the ¥140 level is essentially the “floor” in the market. I do anticipate that the buyers will return between now and then, so I am looking for some type of bounce or support of candle in order to get long again.
GBP/JPY Video 18.02.20
All things being equal, you should keep in mind that the market is highly influenced by risk appetite, so pay attention to how stock markets are doing and the like. Ultimately, I do believe that the market will find a reason to bounce, but we may be a couple of days away from doing so. Longer-term, I believe that the market goes looking towards the ¥148 level, but if we were to break down below the ¥139 level, then it’s likely that we could go down to the ¥135 level. Ultimately, this is a market that will continue to be very volatile and noisy, but that’s nothing new for this pair. All things being equal, we need to see more of a “risk on” attitude around the world for the Japanese yen to sell off, thus pushing this market to the upside.