The British pound has rallied a bit during the trading session on Monday, reaching towards the 50 day EMA. The ¥142 level is an area that should attract some attention, but quite frankly I think we are looking at a scenario where this will move back and forth based upon risk appetite, which of course is all over the place when it comes to the latest headlines involving the coronavirus and the like.
GBP/JPY Video 11.02.20
That being said, I believe that the market will probably continue to see a certain amount of malaise so even if we do rally from here, I think it will be very slow and grinding more than anything else.
I anticipate that a lot of this will be looked at as a technical bounce, as we had reached towards the previous bullish flag that extends from ¥140, an area that is a large, round, psychologically significant figure. Ultimately, this is a market that should continue to bounce a bit, but we need to see some type of good news to make that happen. Alternately, if we were to break down below the ¥139 level, then the 200 day EMA will probably be a target for sellers. That area could offer support though, as it typically is important for longer-term trends. If we were to break down below that level, it’s very likely that the British pound will fall apart but that seems to be very unlikely to happen in the short term. All things being equal, the market should continue to find support just below.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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