The British pound has rallied ever so slightly against the Japanese yen during the trading session on Friday, but we have seen a bit of a hesitation at the ¥151.50 level yet again. Because of this, it is very likely that we will continue to struggle to gain traction, but if we do manage to break above the ¥151.50 level, then we will almost certainly go looking towards the ¥152.50 level, an area that we had seen resistance previously.
GBP/JPY Video 30.08.21
When I look at the totality of the market, it certainly looks as if it is trying to form some type of “topping pattern” which of course signifies a lower pricing. At that point, if we can break down below the most recent low, I believe that this market is going to unwind, perhaps going down to the ¥145 level, possibly even as low as the ¥140 level. That obviously would be a very “risk off” type of move, as the Japanese yen is considered to be a bit of a safety currency. In this scenario, I imagine you would see a lot of selling pressure in multiple markets, not just this one. Anything that would have growth attached to it would almost certainly suffer, as a result of the negative attitude.
On the other hand, if we were to break above the recent swing high, then it opens up a potential move towards the ¥155 level, which has been extraordinarily resistive recently. Whether we get above there is a completely different question, but I suggest that perhaps it seems very unlikely any time in the short term as there are so many uncertainties out there.
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