The British pound has pulled back a bit from the 50 day EMA on Wednesday, as we continue to see bits and pieces of negative headlines that will for this market all over the place. On the other hand, it is important that Brexit is paid attention to as well, as the market will certainly reflect that. The 50 day EMA is of course a technical level that a lot of traders will pay attention to, so it is not a huge surprise that we would pull back from there. Whether or not we can break above there is a completely different scenario, but at this point I think that it will simply be due to overall risk appetite, perhaps driven by coronavirus figures.
GBP/JPY Video 02.07.20
Looking at this chart, the market could very well drop down towards the ¥132 level, which is an area that has seen a lot of buying pressure. If we break above the 50 day EMA, then it is likely that we are going to reach towards the ¥135 level. Regardless, I think there is a lot of volatility just waiting to happen and therefore it is going to be a pair that you should be cautious with your position size, as there are so many different moving pieces out there right now that could throw things into disarray. Ultimately, I do believe that there is potential for huge moves, but right now as we head into the jobs figure on Thursday, it is probably going to be very erratic trading to say the least.
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This article was originally posted on FX Empire
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