The British pound has rallied a bit against the Japanese yen during the trading session on Thursday, reaching towards the ¥133.50 level. The market has essentially been grinding sideways, dancing between the 50 day EMA and the ¥132 level underneath. The last couple of sessions have been essentially noisy and tight, which is a good proxy for risk appetite has been.
It is worth noting that the 50 day EMA has been tested once before and showed a certain amount of resistance, so I think that we will probably see sellers near that area as a projection forward. If we can break above the 50 day EMA, then the next stop will be the ¥135 level which has a certain amount of psychological importance. I would be more than willing to short the pair in that general vicinity at the first signs of exhaustion.
GBP/JPY Video 26.06.20
To the downside, the ¥132 level has held rather well so far, and I think any rally that you fade on short-term charts will have to keep that level in mind. That would make an excellent target on something like a one hour chart. In the meantime, I think we do not have any obvious direction in the short term, but I believe that as traders continue to worry about coronavirus infection rates, it is worth noting that the pair is sensitive to risk appetite so I think we will probably face a bit more downward pressure than up, at least from a sustainable outlook. That being said, the next 24 hours might be more of the same sideways action that we have seen.
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This article was originally posted on FX Empire
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