The British pound was a bit choppy during the trading session on Friday, but as you can see we are looking to finish the day with a positive candle. The ¥140 level above there is major resistance, and I think it will take quite a bit of work to get above there. If we can break above the ¥141 level, that would be very bullish, but I also recognize that the 50 day EMA is starting to reach that level as well, so that makes it even more important. However, I recognize that this pair is very sensitive to global risk, something that will make it especially vulnerable right now.
GBP/JPY Video 14.01.19
If the US/Chinese trade relations can pick up a bit, that should help this pair going forward. However, we also have to worry about the Brexit, as it of course is a major driver of where the pound is going to go next. We have recently seen a lot of technical damage to this pair, so I certainly think that is going to be a lot easier to drop from here that it is rally. I think that we could also watch stock markets to see if there is a bit of panic out there, and if it comes this will be the first place I will be shorting. With all of the technical damage that has been done recently, I think it makes sense that there’s only a certain amount of support underneath. I do favor the downside trading, but the question is whether or not we can do it here, or if we do it from higher levels.
This article was originally posted on FX Empire
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