The British pound has rallied against the Japanese yen quite nicely again during the day on Wednesday but as we had seen previously, the market cannot seem to break above the ¥139 level. I believe that is a major resistance barrier in the short term, so it is worth paying attention to. I also believe that it is a resistance barrier that also has roughly 100 pips worth of selling pressure. Once we break above the ¥140 level, it is likely that we will go much higher. Until then, I think that we continue to buy dips and take profit accordingly.
GBP/JPY Video 06.08.20
To the downside I believe that the 200 day EMA near the ¥136 level is massive support and should continue to be a major, extending down to the ¥135 level. Remember that this pair is highly sensitive to risk appetite, so I think at this point it is only a matter of time before we do break out. Furthermore, the British pound continues to strengthen against the US dollar, which of course is the main “measuring stick” of a currency and its strength or weakness.
One thing that is working against the value of this pair is the fact that the Japanese yen is strengthening against the US dollar, which is also its main “measuring stick.” That does cause a little bit of sluggishness, and of course the British pound is facing major resistance in the form of the 1.3150 level. If it can break out against the dollar, that probably drags his higher, especially for some reason the Japanese yen starts to lose value as well. Remember, these cross pairs are simple triangulation of two other major pairs.
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This article was originally posted on FX Empire
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