The British pound has gone back and forth during the trading session on Monday as traders start to weigh whether or not there is going to be a rate cut at the end of the month by the Bank of England with very anemic GDP figures. At this point, the market has been grinding a bit lower but there is a significant amount of support just below. The 50 day EMA should offer a bit of support, so it’ll be interesting to see what happens in that general vicinity. While the market has been a bit a bit sluggish during the trading session on Monday, but ultimately this is a market that seems to have a lot of support underneath, as seen from the previous bullish flag. Breaking through that bullish flag would be very difficult, but if we did slice through the ¥139 level, that would be a very negative sign.
GBP/JPY Video 14.01.20
With that in mind I believe that the market will probably find buyers as we drift towards the ¥141 level again, but if the market does break above the highs from the previous couple of sessions, that could kick off a move much higher. Remember, this pair is highly sensitive to risk appetite, so if there is more of a “risk on” move, that should drive this market towards the highs again. Otherwise, expect it to drift lower, and test a lot of these major areas below which I see is a roughly 200 PIP range.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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