The British pound initially tried to pull back during the trading session on Tuesday, but then turned around to break towards the ¥133 level. At this point, if we can break above that level, then it’s possible that we could then go to the ¥135 level. That is an area where I would expect to see a lot of exhaustion and massive resistance, so therefore it’s likely that signs of exhaustion will be jumped on at that point.
GBP/JPY Video 11.09.19
Keep in mind that this market is highly sensitive to risk appetite, and therefore as we see more confusion, it’s likely that the pair will drop. The short term though, it seems like traders are willing to give the benefit of the doubt to the Americans and the Chinese perhaps speaking rather soon, so ultimately it’s going to be a short-term rally followed by some type of bad news that sends this market right back down. Not only is this a wrist sensitive market, but with all of the nonsense going on around the Brexit right now it’s difficult to imagine a scenario where this market rallies for the longer-term. The British pound of course is going to continue to suffer at the hands of the back and forth with politicians, so keep this in mind that at any moment we could get some type of announcement that pummels this market right back down. It is because of this that I look for exhaustion to sell, and have no interest in trying to buy.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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