The British pound has gone back and forth during the trading session on Thursday, considering the ¥132 level to be important. At this point, it looks like the market is likely to continue to see noise in this general vicinity, but at this point it looks as if the ¥132 level is going to continue to be quite difficult to break above. We have shot above there during the previous couple of candlesticks, but you will see that the market gave up the gains. I think this is going to continue to be a very noisy trading area, as this pair typically is and of course is overly sensitive to the idea of risk appetite.
GBP/JPY Video 22.05.20
To the downside, I suspect that the ¥130 level could cause some support, and if we break down below there it is likely that the market continues to go to the downside. Breaking down to a fresh, new low will clearly add more pressure in this market to go down towards the ¥125 over the longer term, with perhaps some minor support at the ¥127.50 level. With this being the case, I would anticipate that the market is likely to be exceedingly difficult to manage from a short-term prospect, so keep your position size relatively small and hang on to the downside. As far as buying is concerned, I would need to see this pair break above the 50 day EMA which is painted in red on the chart. If that is going to be the case, then I would consider a run towards the ¥135 level highly likely.
This article was originally posted on FX Empire
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