The British pound has gapped lower during the opening on Monday, but then turned around to fill that gap. The thing that should be said about this gap is that it isn’t necessarily that big, so I don’t know that it will become a major issue. Nonetheless, this is a market that is driven upon by risk appetite, and therefore should be paid close attention to.
GBP/JPY Video 21.01.20
Part of what we’ve seen recently is negativity in Great Britain, especially with the retail sales numbers disappointing on Friday. Nonetheless, this is a market that will continue to be erratic, but risk appetite in general is what drives the GBP/JPY pair more than anything else. It should be noted that the 50 day EMA is underneath and starting to turn higher, so it is possible that we have that as support as well. We have been in an uptrend for some time, but if that’s going to continue to be the case, we need to break above the highs from Friday. That of course would free this market to go towards the recent highs, which obviously would be a continuation of what we have seen for the last several months.
To the downside, it’s very likely that not only the 50 day EMA will offer support, but so will the ¥140 level. With this, I’m looking for an opportunity to buying dips going forward and believe that we will revisit the ¥148 level relatively soon. Obviously, if we were to break below the ¥140 level then we need to start taking a look at whether or not the trend can continue.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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