British Pound Continues Noisy Dance Against Yen

The British pound has been very noisy over the last couple of days against the Japanese yen, which is not a huge surprise considering everything that is going on in the world. Quite frankly, the risk appetite going back and forth has a lot to do with what we have seen in the British pound against the yen, as it is very sensitive to the risk appetite of traders around the world. The Japanese yen is considered to be a “safety currency”, so that typically will attract inflows during times of uncertainty.

GBP/JPY Video 18.02.22

Looking at this chart, I believe that the ¥155 level underneath will continue to be an area of support, especially now that the 50 day EMA is coming into the picture. With that being the case, I think is probably only a matter of time before we see buyers jump in if we get down to that area. On the other hand, the ¥158.50 level continues to be massive resistance, and therefore I think it can to be difficult to overcome.

Looking at this chart, is very likely that we continue to see noisy behavior more than anything else, and therefore you need to be cautious with your position size. Do not think for a second that this is going to be easy, but it certainly looks as if you need to be nimble, trade with a small position, and look at this through the prism of what the latest headline is. In other words, this is going to be a great place to lose money unless of course you have the ability to sit here and watch the charts all day.

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