The British pound has gone back and forth during the course of the trading session on Tuesday as we continue to see a lot of volatility. Nonetheless, this is a market that I think is struggling with the idea of whether or not we are going to form a “higher high”, or are we going to simply roll over and go looking towards the ¥150 level? Because of this, the market is going to continue to see a lot of noisy behavior but at the end of the day this is going to be one of the more thought-provoking pairs, due to the fact that it is so highly sensitive to risk appetite around the world. This is not just simply a matter of the British pound or the Japanese yen, but whether or not the world economic situation is getting better or worse.
GBP/JPY Video 08.09.21
The shape of the candlestick as I record this video shows a little bit of neutrality but notice how the couple of days preceding this candlestick showed very similar behavior. In other words, it looks as if the market is trying to find enough selling pressure to go lower. With that in mind, I think that what we will see next is a move lower, but I cannot guarantee that obviously. Because of this, I would be short of this market with a very small position at best, only adding once we break down through each major round figure. Because of this, the market is likely to be very noisy, but once we get some type of clarity, I think we are going to see a major move in one direction or the other.
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