The British pound fell against the Japanese yen initially during trading on Wednesday but is starting to see bits of support near the ¥140.50 level. That being the case, it’s likely that the market will continue to be noisy, but I certainly think that the sellers are still very much in control. We may get a bit of a short-term reprieve, but I would be more than willing to sell rallies as there are plenty of reasons to think that there could be negativity in the financial markets going forward. There are geopolitical issues obviously, and that of course the entire situation involving the Brexit.
That being said, it looks as if the ¥140 level is going to be rather supportive, so a bounce is probably necessary. This will give you an opportunity to reload shorts, and I would certainly look at it as such. Buying is all but an impossibility in this environment, so keep that in mind. Granted, if we get some type of announcement with the Brexit reaching a potential conclusion, then of course that could change everything. Until then, I suspect that the British pound will continue to struggle against the Japanese yen, especially as there are a lot of geopolitical concerns around the world right now, in this pair of course is risk sensitive anyway. At this point, it’s hard to come up with the reason why we should be buying this pair, and I think we will continue to see overall softness.
GBP/JPY Video 16.08.18
This article was originally posted on FX Empire
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