The British pound initially fell during the trading session on Wednesday, but then turned around to rally a bit to show signs of life. The ¥135 level being broken to the downside of course is a major breach of psychological support, and now it looks as if we could turn around to bounce and test that area again. If we fail at the ¥135 level, then the market will continue to go much lower. Beyond that, if we break down below the last couple of trading sessions, then it’s likely we go down to the ¥135.50 level.
GBP/JPY Video 18.07.19
We are obviously in a downtrend, so it’s not necessarily likely that we are going to turn around and rally for any significant amount of time. There is a lot of noise above the ¥135 level as well, so quite frankly I think at any juncture above we could see sellers jump in. The play going forward is more than likely going to be a bit of a bounce, and then fading the rallies as they show signs of exhaustion. I have no interest in trying to go long of this pair, because quite frankly there are so many things out there that could move it lower. We have the Brexit of course, and then of course after that we have the global economy slowing down. Adding to the mix is the instability of the US/China trade relations, and therefore it’s likely that we could have that affect the market as well. Remember, this is a “risk on/risk off” pair.
This article was originally posted on FX Empire
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