The British pound rallied a bit during the trading session on Tuesday again, reaching towards the 50 day EMA. Ultimately, this is an area that has attract a lot of attention, and now that we are below that level it does suggest that there is a little bit of resistance that will come into play. That being said, I don’t have any interest in trying to short this pair, because there is a significant amount of support just below. All things being equal, this pair will move on a “risk on/risk off” type of scenario, but it currently seems as if there are a lot of moving pieces right now that could throw the spear around.
GBP/JPY Video 12.02.20
To the downside I would anticipate that the 1.40 level should come into play, offering a significant amount of support. That support extends down to at least the ¥139 level, so I do not believe that it makes much sense to be a seller until we break through there. In the meantime, I believe that short-term pullbacks will continue to be buying opportunities as equity markets are starting to turn around. That being said, there is a lot of noise above at the ¥143 level to chew through, and if we were to break above there then the ¥144 level would be next. After that, the ¥145 level would be the next major level. Ultimately, this is a pair that seems as if it is trying to form a little bit of a base in this area, but I also recognize that there is a lot of global noise out there.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- Crude Oil Price Update – Next Major Move Hinges Upon Russia’s Decision on Additional Production Cuts
- Silver Price Forecast – Silver Markets Quiet As Powell Testifies
- Gold Price Forecast – Gold Markets Rollover Slightly On Tuesday
- Fed Concerned About Coronavirus, But Not Expected to Raise Rates
- AUD/USD Price Forecast – Australian Dollar Recover Slightly During Session On Tuesday
- E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 29379, Weak Under 29283