British Pound Reaches Towards 200 Day EMA Against Yen
The British pound has rallied a bit during the course of the trading session on Wednesday to reach towards the 200 Day EMA again. This is an indicator that a lot of people will pay close attention to, and therefore it is not a huge surprise to see that we have pulled back just a bit. That being said, we could very well break above there in recovery, due to the fact that the market has been a bit oversold in the short term.
GBP/JPY Video 10.03.22
On the downside, I still think that the market probably goes looking towards the ¥150 level over the longer term, due to the fact that the number is a large, round, psychologically significant figure, and of course, an area that has been tested more than once. With this being the case, I think it makes a natural target for sellers. The market will continue to see a lot of volatility in general, which is something that this particular currency pair has a high sensitivity to.
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It is basically about being “risk on”, or perhaps “risk off.” The Japanese yen is considered to be a safety currency, so if we get a lot of fear out there, it does make a certain amount of sense that we would see the Japanese yen strengthening over the longer term. This does not mean that it happens in one shot and it does it mean that it happens immediately, but it does mean that it happens given enough time. Ultimately, I have no interest in trying to buy this market, so it simply a matter of waiting for signs of exhaustion that I can jump on.
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