The British pound has struggled to break out during the trading session yet again on Tuesday, as headlines fly around the world, almost none of which are good. Ultimately, this is a market that should continue to be very sensitive to not only Brexit, but risk appetite around the world in general. Risk appetite around the world in general right now is struggling, mainly due to the fact that there is so much uncertainty. The comments by Donald Trump that a trade deal could wait until after the election has rattled the markets, and then NATO arguing with Turkey has done no favors as well. Ultimately, this is a market that is more than likely going to pullback before trying to break out again.
GBP/JPY Video 04.12.19
Remember that this pair does tend to be extraordinarily volatile, so as algorithms read the headlines and make multimillion dollar decisions, it gets thrown around quite violently. Quite frankly, in this environment it’s difficult to imagine that it’s going to be easy to trade, but that should be nothing new as the last three years have featured a lot of nonsense when it comes to Brexit and the headlines involving that. With that being the case, I do like the idea of going long for a longer-term trade, but I need to see this pair take out the ¥142 level above, as it would be a significant break of resistance. At this point, I believe that the market will eventually do that, but it may need several attempts as it has been so difficult to overcome. The so-called “golden cross” underneath is still in effect, so it should be paid attention to as a potential longer-term signal.
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This article was originally posted on FX Empire
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