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British Pound Reaches Down Towards 50 Day EMA Against Japanese Currency

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·2-min read
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The British pound has fallen significantly during the course of the trading session on Friday to reach down towards the 50 day EMA. Perhaps more importantly, the market has broken through the ¥155 level, which of course is a large, round, psychologically significant figure, and an area that has been important previously. At this point, there is a little bit of support in this general vicinity, but it is very unlikely that we hold unless something changes drastically when it comes to risk appetite around the world.

GBP/JPY Video 24.01.22

The market previously had gone parabolic like this, and as you can see fell apart to reach down towards the ¥150 level. That is a very real possibility at this point, but it does not necessarily mean that we are going to fall apart immediately. In fact, if you look at the last time we pull back, it was quite orderly for most of the move.

The alternate scenario of course is that we recapture the ¥155 level, which of course would be a very bullish sign at this point in time. Whether or not it can happen is a completely different question, but obviously that would be a big deal. At that point, we could go back towards the highs, but we would need to see other markets around the world pick up risk appetite as well, because of course this market is so highly influenced by the overall attitude of traders around the world. Ultimately, this is a market that could run away from you if you were not careful, but position sizing can help you take care that potential problem as well.

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

This article was originally posted on FX Empire

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