The British pound has rallied a bit during the trading session on Wednesday, reaching towards the ¥143 level. This is an area that should continue to be very important, as it was the scene of a gap, and a shooting star from last week. All things being equal though, it does look as if the market is simply killing time before trying to build up enough momentum to go higher. I also believe that the ¥140 level underneath is support underneath, and I consider that whole area to be a “floor” in the market. Nonetheless, this is a pair that will be very volatile, as is per usual. This market is very sensitive to risk appetite in general, so therefore you should pay attention to how stock markets and risk appetite in general is behaving.
GBP/JPY Video 13.02.20
Looking at this chart, I do believe that the ¥145 level will eventually be tested, but we probably have quite a bit of work to do as not only is there are a lot of concerns when it comes to the coronavirus, but there are also concerns when it comes to the British negotiating with the European Union. Because of this, I believe that it’s only a matter of time before value hunters come back in on these dips. However, if we were to break down below the ¥139 level, then I would consider that “floor” completely busted in the market would go much lower. Ultimately, I expect an extreme amount of volatility but anybody who has traded this market for a while should be used to that.
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 Forecast – Crude Oil Markets Trying To Recover
- Natural Gas Price Prediction – Prices Recapture Resistance; But Trend Remains Downward Sloping
- Is Yesterday’s USDX Decline About to Trigger PMs Rally?
- Gold Daily News: Wednesday, February 12
- USD/CNY Price Forecast – Lowest Volatility Day for the USD/CNY in Two Weeks
- Gold Price Prediction – Gold Risk Premium Dwindles as Riskier Asset Rally