British Pound Continues to Show Weakness Against Yen

The British pound has dropped yet again against the Japanese yen during the trading session on Tuesday, as we await the Federal Reserve meeting on Wednesday. Quite frankly, this is a situation where we need to see what the Federal Reserve has to say and of course the market reaction to it in order to put a lot of money into the marketplace. After all, there are a lot of concerns when it comes to whether or not the Federal Reserve is going to continue to tighten, which has more of a “risk off” type of attitude jumping into the market. On the other hand, if the sound “less hawkish”, that could have more risk appetite coming into the picture, thereby sending more risk into the market and lifting this pair.

GBP/JPY Video 26.01.22

All things been equal, if the Federal Reserve does exactly what it has recently suggested, it is very possible that we continue to go lower, perhaps reaching towards the ¥152.50 level. That is essentially the next potential support level based upon previous action, and the fact that it is between two major areas of interest. On the other hand, if we do rally at this point in time, the market could go looking towards the 50 day EMA, followed by the crucial ¥115 level.

Because of this, I think there is a lot of noise above that could cause an issue, and quite frankly we would need to see the Federal Reserve step in and push risk appetite higher in order to make a breakout possible. All things been equal, you are probably better off sitting on the sidelines until we get a little bit of clarity out of the Federal Reserve.

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