The British pound went back and forth during the trading session on Thursday, initially breaking out but as soon as Donald Trump signed the congressional bill backing the Hong Kong protests, the markets fell apart again. At this point, the algorithm traders have taken over based upon the random headline. At this point, the market is likely to continue going higher given enough time, but we need good news, or at least the lack of bad news. With that being the case it’s likely that the pair will continue to struggle in general, as we have not gotten much in the way of momentum. At this point, if we can break out above the ¥142 level, then the market can really start to take off. The question now is whether or not we get the move.
GBP/JPY Video 29.11.19
Given enough time we should, but the turnaround that we had seen almost instantaneously after Trump signed that bill shows just how skittish in noisy the markets are going to continue to be. With that, trade small, and trade longer-term moves more than anything else. This is a market that can’t be trusted, because the machines are starting to read headlines and place trades based upon it. Ultimately, the market should then go to the ¥149 level, but we need certainty and clarity with the British elections between now and then. At this point, we simply don’t have it and therefore although we do look bullish, it doesn’t look as if we can simply “buy-and-hold” quite yet.
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This article was originally posted on FX Empire