The British pound fell rather hard during the week, reaching towards the ¥140 level, an area that is very crucial as far as a large, round, figure aspect is concerned. That being the case, it’s likely that we will continue to see a bit of interest in this area, and the 50% Fibonacci retracement level being there of course doesn’t hurt the situation either. With that in mind, I think that the trade is probably going to show itself on the daily charts, not necessarily the weekly chart. Because of this, you will have to pay attention to shorter time frames but it could give you a hint as to where we go next.
GBP/JPY Video 20.05.19
Alternately, if we break down below the weekly candle stick we could go down to the 61.8% Fibonacci retracement level which is essentially the ¥138 level. That’s an area that I think will continue to be very crucial, so if we break down below there we could get a return trip to the ¥131 level. We need to see this market save itself, otherwise things could get rather ugly in the short term. With that in mind, I’m watching this pair, but from the shorter time frames more than anything else because sometimes it’s the level that matters, not necessarily the timeframe that you are dealing with. Expect volatility, as this pair is so geopolitically sensitive anyway, and of course is that whole thing going on with the Americans and the Chinese.
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This article was originally posted on FX Empire
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