The British pound has initially pulled back a bit during the trading session on Thursday but then crashed into the top of several candlesticks from the previous sessions this week. That being said, the market is very likely to find quite a bit of selling pressure just above, especially near the 50 day EMA. At this point in time it’s very likely that the market could roll over a bit, and that of course makes sense that the GBP/JPY pair could continue to break down. At this point, the ¥130 level underneath should be a significant support level, as it is not only a large, round, psychologically significant figure, but it is also an area where we have seen a lot of resistance previously.
GBP/JPY Video 11.10.19
Keep in mind that this pair is highly sensitive to risk appetite, and of course the nonsense that continues with Brexit. Even beyond that, the US and China have sat down to start talking, so it’s very likely that there will be headlines that cause a “risk on/risk off” scenario. Ultimately, this is a market that will continue to be very noisy and susceptible to the occasional rumor or Tweet that comes out of days that could throw around. If the market were to break down below the ¥130 level, it’s very likely that we would then go towards the lows yet again. Obviously, the alternate sign would be that a significant break above the ¥133 level could open the door to ¥135. However, that’s the least likely of the scenarios.
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This article was originally posted on FX Empire
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