The British pound has fallen rather significantly during the course of the week, reaching down towards the ¥150 level before bouncing a bit. With this being said, the market has been threatened, but then turned around to show signs of life again. All things being equal, the market is likely to continue to be very noisy, as we are in an area of extreme choppiness. If we were to break down below the ¥149 level, that could open up a move down to the ¥145 level, perhaps even the ¥140 level over the longer term. This of course would be the “risk off” scenario.
GBP/JPY Video 12.07.21
On the other hand, if the market were to rally from here, the ¥155 level could be a bit of a target, but it is not until we break above the ¥156 level that it would be a longer-term move just waiting to happen. In general, the market had gotten up here too quickly, and the question now is whether or not risk appetite can continue? At this point, it is very difficult to imagine a scenario where I would be “all in” when it comes to this pair at the moment, because quite frankly there are far too many potential headwinds.
With this being the case, it still looks bullish in general, but this is a market that I think continues to see a lot of external influences in the form of risk appetite, so therefore it is a bit difficult to quantify at times. You will have to take your cues from other markets as to whether or not this one should be rising.
For a look at all of today’s economic events, check out our economic calendar.