The British pound has initially pulled back during the day on Thursday, breaking down below the ¥132 level, before turning around and reaching towards the 50 day EMA. The 50 day EMA is currently at the ¥132.50 level, an area that of course will attract a certain amount of attention. Because of this, the market should be paid attention to for the next day or so as it could give us a signal as to where we are going next. Longer-term, it’s obvious that we are in a downtrend but a break above the 50 day EMA on a daily close after the jobs figure on Friday could be reason enough to reach towards the ¥135 level.
GBP/JPY Video 04.10.19
The alternate scenario of course is a break down below the bottom of the trading session on Thursday, which sends this market down towards the ¥130 level. Ultimately, this is a market that will be sensitive to risk appetite overall, as the Japanese yen is of course the “safest currency” of the G 10. The British pound of course also has the specter of the Brexit situation taking over and, so there is still a lot of weight around the neck when it comes to this pair. There is a 500 PIP range that the market is trading and right now, so if we were to break out of this range, then the market could really get that move. However, the short-term I suspect that it’s not until the end of the week close that we get an idea as to which one of these levels we are attacking next.
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This article was originally posted on FX Empire
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