The British pound initially tried to rally against the Japanese yen during early trading on Wednesday but has given back the gains to show signs of hesitation. That being said, the ¥150 level underneath should continue to offer a bit of support, and therefore I think that we will continue to see a lot of buyers in this general vicinity. Yes, it has looked a little bit suspicious over the last couple of days, but there are plenty of reasons to think that this big figure will continue to hold, not the least of which would be that the risk appetite of traders around the world continues to look rather strong.
GBP/JPY Video 22.04.21
The 50 day EMA underneath should continue to be supported, and if we were to break down below the 50 day EMA, then you could see a little bit of a continuation to the downside. That being said, this is a market that has been very noisy, and has gotten a bit overextended, so I would not be surprised at all to see this market simply go back and forth in the short term in order to build up the necessary momentum to go higher. On the other hand, if we do break down below that 50 day EMA, then it could open up a move down to the ¥145 level.
At the ¥145 level, it appears that the 200 day EMA is starting to reach towards that area, perhaps offering support. The ¥145 level has been important in the past, and of course would attract attention based upon that alone. All things being equal, if we break down below that level then I would become concerned about the overall long-term trend. At this point, this looks like a simple short-term pullback.
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