The British pound rallied a bit during the trading session on Friday, reaching towards the ¥135 level. At this point, that’s an area that had seen the lot of support previously, and now it looks very likely that we are going to continue to see resistance. I also believe that the resistance extends to at least the ¥136 level, so if we can break above that level, it doesn’t necessarily mean that we are going to be buyers. Signs of exhaustion will be an opportunity to start selling again. We are in a long-term downtrend, and that should not be forgotten.
GBP/JPY Video 22.07.19
The British pound of course is suffering at the hands of the Brexit, and although we have gotten a bit of a reprieve in the short term, keep in mind that the British pound does suffer due to the uncertainty. Looking at this chart, I think it’s only a matter of time before we revisit the lows, and quite frankly have no interest in buying this pair. Quite frankly, if I won a “risk on” trade in order to short the Japanese yen, I would do it against something like the Australian dollar or even the New Zealand dollar which will offer you the same type of volatility but avoid the Brexit. I have no interest in trying to fight this trend, even though a bounce is probably necessary just to bring in more players.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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