The GBP/JPY level quite often represents the overall risk appetite around the world, and while we did see a significant bounce over the last couple of days, we are starting to run out of momentum. This suggests that we are still continuing to see a lot of questions out there when it comes to whether or not we are going to continue to go higher, as there are a lot of questions when it comes to whether or not we are going to see growth around the world. If we do not see more of a “risk on” type of move, then it is very likely that we will see this pair fall.
GBP/JPY Video 26.08.21
If we break down below the lows from the trading session on Monday, then I think we go looking to test the bottom of the hammer from a couple of weeks back, which was the swing low. If we break down below there, then it is likely that we go looking towards the ¥147.50 level, and then perhaps even the ¥145 level. On the other hand, if we were to turn around a break above the ¥151.50 level, then it is likely that we could go looking towards the ¥152.50 level. That is an area that has been resistance and of course we have sold off quite drastically. Obviously, there should be a significant amount of supply in that general vicinity.
As things stand right now, when you look at the overall action since we broke above the ¥150 level the first time, it certainly looks as if we are struggling and forming a larger “topping pattern.” Because of this, I suspect that we could see quite a bit of negative pressure in the next few weeks.
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