The British pound has rallied against the Japanese yen during the trading session on Tuesday to show signs of strength yet again. However, there is a significant amount of resistance right here at the ¥152.50 level that extends to the ¥153 level. Because of this, the market pausing in this area is not a huge surprise. Because of this, if we were to break above the ¥153 level, then it is likely that this market goes much higher.
GBP/JPY Video 15.09.21
On the other hand, if we turn around and show signs of exhaustion, we could go right back towards the ¥150 level again. That is an area that show significant interest, so breaking down below that level would of course be a very negative sign, perhaps opening up a major sell off. Remember, this pair is highly sensitive to risk appetite, so therefore if it breaks down that typically means that there is a lot of negativity going on around the world in general. You will know this when you see it, and therefore it will not be much of a surprise as other markets will be falling apart such as stock indices and other risk appetite situations.
We are getting close to a major inflection point, so be cautious about your position size, and only build up as the trade works out in your favor. With that in mind, paying close attention to this pair could give you a bit of a “heads up” as Howell to trade other risk appetite related pairs.
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