The British pound rallied significantly during the trading session on Friday, slamming into the ¥130 level. This is an area that of course is a large, round, psychologically significant figure and an area that has caused a bit of resistance during the previous session. Having said that, we are starting to see a little bit of selling pressure. Ultimately, the market breaks above the top of the candlestick from the Tuesday session, roughly ¥131, then we could bounce towards the ¥134 level. In the meantime, I believe that it’s very likely that we will fade strength though, as we have seen a lot of negativity in this market for good reason.
GBP/JPY Video 23.03.20
Looking at this chart, we reached down towards the ¥125 level, which underneath was a major round figure that of course has attracted a lot of attention but at this point I think it’s only a matter of time before rallies get faded. The question now is whether or not it happens at the ¥130 level, or if it is at the ¥134 level? Alternately, we could just roll over and go straight down if we get some type of major shock to the system yet again. Ultimately though, people will sell this market eventually based upon some type of negativity. Having said all of that though, the reality is that we have probably been a bit oversold for a while, so now that we have bounced it’s not a huge surprise. I look for opportunities to sell though, not necessarily looking to buy this pair.