The British pound has fallen again during the trading session on Thursday again, to reach down towards the ¥150 level. This is the third day in a row we have seen significant selling, but quite frankly we are still very much in a huge uptrend, so this pullback should be welcomed by those looking to find a certain amount of value in a market that had run far too hot.
GBP/JPY Video 09.04.21
The 50 day EMA sits underneath and is starting to reach towards the ¥150 level as well, so I do think that sooner rather than later we will see buyers come back into the market. However, if we were to break down below the ¥148.50 level, that could kick off a bigger correction, perhaps reaching down towards the ¥145 level. That will obviously attract a lot of attention just as the ¥150 level will, so I think somewhere in that area would be the “floor in the market.” After all, the 200 day EMA is starting to approach that level so it is probably only a matter of time before buyers would come back. If the ¥145 level gets broken to the downside that could be the end of the overall uptrend, sending this market crashing much lower.
Keep in mind that the pair is highly sensitive to risk appetite, so that is worth paying close attention to. If the rest of the world is happy, generally this pair will rally, but if we are seeing stock markets take beating, as generally negative for this pair as money will flow back towards the Japanese yen. It is worth noting that the Japanese yen has been oversold for a while, so this correction is being seen against all Japanese yen pairs.
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