The British pound has gone back and forth during the course of the trading session on Wednesday as we have run into a significant amount of resistance yet again. Ultimately, the market is likely to continue to go back and forth between the 50 day EMA below, and the ¥151.50 level above. If we were to break above there, then the market is likely to go looking towards the ¥153.50 level, which would coincide with the nice uptrend that we have seen for some time. However, it is worth noting that the market has been a lot of choppy air as of late, so we need to ask the question as to whether or not we are starting to run out of momentum and that we could break down, or are we simply grinding away sideways in order to work off the froth?
GBP/JPY Video 29.04.21
I believe that the next few sessions will probably be very noisy, but that 50 day EMA is without a doubt a significant support level that a lot of traders will be paying close attention to. Until we break down below there, I do not necessarily think that the market is likely to break down significantly. However, we do that it is likely that we could go down to the ¥145 level, which is where the 200 day EMA is rapidly approaching. Breaking that would of course change the overall trend, so I think you are looking at the market as one that is very noisy and therefore you will need to keep your position size reasonable.
For a look at all of today’s economic events, check out our economic calendar.