British Pound Continues to Carve Out Range Against Yen

The British pound has gone back and forth during the course of the trading session on Tuesday as we are trying to figure out where we are going from a risk appetite perspective. Keep in mind that the GBP/JPY pair is highly sensitive to risk appetite, with the Japanese yen being the “ultimate safety currency.” That being said, there are so many moving pieces when it comes to risk appetite around the world that it is not hard to see how this is going to be a difficult market to trade. If we do get some type of clarity with some of the risk appetite around the world though, we could get a nice moving.

GBP/JPY Video 16.02.22

The ¥158 level above being broken would be a good sign and could send this market much higher. At that point, the market could very easily go looking towards the ¥160 level. To the downside, the ¥155 level is support, so breaking down below that level could be a big sign that we are struggling. At that point time, the market is likely to see a move down to the ¥153 region, possibly down to the ¥152.50 level.

Keep in mind that the Bank of England is getting ready to start tightening, and that is light years ahead of the Bank of Japan. This is why we will more than likely continue to go much higher, assuming that we do not get some type of major risk off situation. Ultimately, the ¥160 level could be the target if we break out to a fresh, new high.

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