The British pound has gotten hammered during the trading session on Thursday to reach down towards the ¥156 level. Ultimately, this is a market that is very bullish, but desperately needed a pullback due to the fact that we had gotten far ahead of ourselves when it comes to rising. In fact, the market has already gone parabolic like this recently, but then crashed from there. At this point in time, the market is likely to continue to go lower, due to the fact that gravity has to come into the picture sooner or later. That being said, we have had a significant bounce in the middle the day, so it will be interesting to see whether or not it actually comes to fruition.
GBP/JPY Video 07.01.22
If we do break down below the Thursday candlestick, I think that leads this market towards the ¥155 level, and then breaking down below there probably wipes out this entire move before it is all said and done, just as we had seen previously. Ultimately, this is a market that has been very violent multiple times over the last several months, so none of this should be a huge surprise. On the other hand, if we break above the ¥158.50 level, then it is possible that we could continue to go higher, but quite frankly I do not like the idea of doing that right away due to the fact that we simply have gone straight up in the air and therefore the correction will become even more drastic in that type of situation. Regardless, I think the healthiest thing that could happen here as a bit of a pullback.
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