The British pound has been very volatile as of late, due to the Brexit and the accompanying headlines, every time it seems that we get good news, eventually something happens to upset the apple cart so to speak. I think that the ¥145 level is a serious resistance barrier, so I would not be surprised at all to see a bit of exhaustion in this area. However, if we break above the ¥146 level, that would be an opening to reach towards the downtrend line that I have marked on the chart. I think at this point, you should continue to fade rallies, as there is more than enough reasons to think that there are a lot of concern ahead of us.
GBP/JPY Video 06.12.18
As the British Parliament debates the entirety of the deal or perhaps a no deal, it’s likely that the British pound will continue to be very noisy. I still think that there is a lot more downside risk than up, so I don’t have any interest in buying at all. If we break down below the lows made during the Tuesday session, that could open up the door to the ¥140 level. Overall, I think that the position size that you choose is going to be crucial as well, as this extreme amount of volatility can make for dangerous conditions. By all means, keep your position size small and keep yourself safe and when it could be a very difficult couple days ahead of ourselves.
This article was originally posted on FX Empire
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