The British pound has initially tried to rally during the trading session on Tuesday but found enough resistance at the ¥135 level to show signs of exhaustion yet again. This is a market that has been hurting for some time, and I think it will continue to go lower. After all, the British pound has to deal with the idea of the no deal Brexit, while the Japanese yen is a bit of a safety currency. Even if the Japanese yen get sold off, this is not the currency you’ll be looking to buy against it.
GBP/JPY Video 24.07.19
That being said, and overall resumption of the trend makes quite a bit of sense, as we simply grind lower. I anticipate that we will probably go down to the ¥133 level, an area that has a certain amount of psychological importance to it. Ultimately, I do believe that the market continues to show signs of exhaustion as there’s simply no reason to own Sterling. That being said, there is always the alternate scenario.
The alternate scenario of course is a daily close above the ¥135 level, because then we could go to the ¥136 level but I also see a lot of resistance there as well. Quite frankly, there’s nothing compelling enough out there to get me to buy this pair unless of course the British and the Europeans signed some type of an agreement. I don’t think that’s going to happen, because quite frankly the British can even agree with themselves.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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