The British pound has fallen a bit during the trading session on Tuesday, reaching towards the ¥135.50 level, but at this point I think that the market will probably find more support at the ¥135 level. This is an interesting move, considering that it is considered to be a “risk off” move, but at the same time we also have indices around the world going higher. With that being the case, I think this is a specific British pound problem.
GBP/JPY Video 19.06.19
If we can break below the ¥135 level and opens the door to wipe out the rest of the move higher, perhaps driving all the way down to the ¥131 level. Ultimately, this is a market that is in a massive bearish move, and there’s nothing on this chart that suggests we should have a lot of buying. The ¥135 level will of course attract a certain amount of attention, but any bounce from there will more than likely offer a selling opportunity after that bounce and at the first signs of exhaustion. I have no interest in trying to buy this pair right now, I think it’s broken and we continue to go much lower, especially considering what we seen over the last couple of days.
All things being equal I think that fading rallies will continue to work in that the previous 61.8% Fibonacci retracement level at the ¥138 level should offer a bit of a “ceiling” in the meantime. Ultimately, I think we are going to continue to go much lower.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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