The British pound has bounced a bit during the course of the trading session on Wednesday, as the ¥152.50 level has offered a slight amount of support. That being said, the market certainly looks as if it is threatened and therefore, I believe that we are probably going to continue to see sellers above in order to the ¥155 resistance barrier in the narrative. With that being the case, I think that we will continue to see more or less a “fade on the rallies” type of situation.
GBP/JPY Video 08.07.21
What we are still very much in an uptrend, certainly looks as if we are struggling to overcome that ¥155 level, and therefore we need to pay close attention to it. We have recently made a “lower high” but have not yet made a “lower low.” Because of this, we are going to have to be very cautious about putting a lot of money into the market until we get some type of confirmation and impulsive candlestick to tell us which direction the market wants to go longer term. Ultimately, this is a market that I think is going to be a major indication as to where risk appetite is going, so you have to pay attention to that as well.
Even if you are trading this market, it can give you an idea as to how traders are “feeling” when it comes to risk appetite. Remember, the Japanese yen is a safety currency, so if traders are more “risk off”, this pair will almost certainly fall. In the short term, I expect more choppy behavior than anything else over the next couple of weeks.
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This article was originally posted on FX Empire
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