British Pound Continues to Plummet Against Japanese Yen

The British pound has shown itself to be vulnerable to selling yet again, as several economic numbers out of the United Kingdom were worse than anticipated, and of course there is a general “risk off” sentiment around the world anyway. At this point time, it looks like we are going to crash into the ¥152.50 level, possibly even the ¥150 level given enough time. If you been following my analysis here at FX Empire, you know I suggested that perhaps the move was far too parabolic, and now it looks as if we are trying to carve out that same consolidation area we had been in forever.

GBP/JPY Video 25.01.22

With this being said, I suspect that if we do get any type of relief rally, we are probably looking at the ¥155 level as a major ceiling. Any rally at this point in time I would look at with extreme suspicion and would not hesitate to sell into the first signs of exhaustion. Quite frankly, what is driving this market has nothing to do with the British pound or the Japanese yen, other than the fact that one is considered to be a safety currency.

With the markets overall struggling, it is difficult to see a situation where this pair does well in the short term. As long as there is a lot of fear out there, we are going to continue to see this pair fall. On the other hand, if the Federal Reserve suddenly changes its tune, this pair will probably shoot straight through the ceiling. I would not hold my breath for that type of move though.

For a look at all of today’s economic events, check out our economic calendar.