The British pound rallied against the Japanese yen during most of the week, but as you can see gave back the gains late as UK retail sales disappoint it. Having said that, this pair does look as if it is still strong, so give it enough time it’s likely that we will see buyers enjoy picking up bits and pieces of this pair on dips. Keep in mind that this is a risk sensitive pair as well, and it extends well beyond Brexit. There are global considerations to take into account as well.
GBP/JPY Video 20.01.20
If the markets are “happy”, then this pair should rally a bit. That being said, it’s never easy and the markets right now have lacked extreme volatility, so this pair has underperformed, just as many of the other currency markets have around the world. However, it looks as if the 50 week EMA is starting to come into the picture as well, curling higher and reaching towards the 200 week EMA. Because of this, it’s likely that we will see a longer-term buying opportunity present itself, and therefore I remain bullish. I believe that the market is still going to go looking towards the ¥150 level, which of course is a large, round, psychologically significant figure, so therefore makes a nice target. If we can break above there, this market will take off to the upside to the downside, I believe that the ¥140 level should continue to offer support as it is not only a large, round, psychologically significant figure, but it is also an area that features the 50 week EMA.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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