The British pound went back and forth during the week against the Japanese yen, but as you can see the ¥140 level above continues offer resistance. I think at this point it’s very difficult to put a lot of money to work, but I think that short-term traders will continue to short this market every time we reach towards the ¥140 level. I also think that if we break down to a fresh low below the weekly candle, we could go much lower from there as well.
GBP/JPY Video 14.01.19
You can see that we had recently broke through the descending channel but formed a massive hammer. However, we did not get follow-through on that this past week, so I think we continue to see a lot of volatility in this area, but I still prefer the downside as I think there are more opportunities for bad things to happen than good. That being said, if we break above the ¥141 level, then I think were probably due for a bounce, perhaps even as high as ¥145. That would be a nice trade, but I think that we are still very much in a negative trend, and I don’t expect that to change anytime soon. This is a highly risk sensitive pair, and with everything that’s going on around the world it’s not surprising that we have negativity in general.
This article was originally posted on FX Empire
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