As the British pound against the Japanese yen is one of the favored risk barometers for Forex traders, it’s not a huge surprise to see that we have seen the market turned back around and fell off as the Chinese release statements involving the US/China trade relations and pointing it out that the wide birth between United States and China continues. At this point, a lot of people have sold in a bid of panic, but the question now becomes whether or not this massive technical level will hold.
GBP/JPY Video 21.05.19
The ¥140 level of course is psychologically important but it also features the 50 day Fibonacci retracement level. At this point in time it’s likely that there will be a bit of a fight here, and on the slightest hint of good news coming out of the US/China situation I suspect that this arc it will probably rally.
However, if we break down below the Friday session lows, then we will probably unwind towards the 61.8 Fibonacci retracement level. That is closer to the ¥138 level, so I suspect that we will probably have a bit of interest in that region. Ultimately, I think that one of these areas will hold and that the market will rally, because quite frankly there aren’t that many people left to sell at this point. Clearly, you can’t be a seller down here, because you are chasing the trade and are about two weeks too late at this point in time. Overall, I’m a buyer but I need to see some type of stability, perhaps on a daily candle stick.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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