British Pound Continues to Toy With ¥155

The British pound has gone back and forth during the course of the trading session on Wednesday as we continue to see a lot of volatility in general. The ¥155 level has been like a magnet for noise, and therefore it is not a huge surprise to see that we have gone back and forth. Further exacerbating the situation is that we have the Bank of England meeting on Friday. While they are anticipated to be raising interest rates by 25 basis points, the reality is that the market already knows this. It is more than likely already been priced in so be interesting to see how that plays out.

GBP/JPY Video 03.02.22

Quite frankly, I think it is difficult to trust any move until we get through that meeting, because a lot of people will be worried about forward guidance by the central bank, and whether or not they sound like they are willing to get aggressive with their tightening policy, or if it is just a “one and done” type of situation. I would anticipate Thursday to be noisy, and Friday to be extremely so. Furthermore, we also have to worry about the jobs number coming out of America on Friday which of course has a major influence on risk appetite.

That being said, as things stand right now, I am still much more comfortable shorting this pair, but I would need to see the wick from the session on Wednesday taken out to the downside in order to put money to work, and even then, I would have to do it in a very small size due to the fact that so many variables lie ahead.

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