The British pound initially tried to rally during the trading session on Friday but gave back the gains as we reach the highs of the previous session. At this point, the market is still supported underneath though, especially considering that the 50 day EMA has been relatively reliable. With this tells me is that the market is simply going to grind and undulate back and forth, trying to find an opportunity to break to the upside.
GBP/JPY Video 27.01.20
The ¥148 level above is a massive resistance barrier based upon the massive spike that we had seen after the elections. Looking at this market, you can see that the ¥140 level has been both support and resistance, and I think that is essentially the “floor” in the market. At this point, the market should continue to go higher, but it needs some type of catalyst to turn around and show signs of strength. At this point though, keep in mind that the market is highly sensitive to risk appetite, and will continue to go back and forth based upon that. It tends to rally as the Japanese yen is sold in good times, while it tends to fall when people are looking for safety. There is also a lot of Brexit noise as well, so keep that in mind. All things being equal though, this is a market that should continue to move right along with stock markets and the like.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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