British Pound Gives Up Early Gains Against Yen

The British pound initially tried to rally against the Japanese yen but did give back quite a bit of the gains as we have seen so many times recently. That being said, keep in mind that this pair is highly sensitive to risk appetite, and therefore a risk appetite drops off a bit, that will certainly have a major influence as to what happens here. The market has significant support underneath at the ¥155 level, so I think if we reach down towards that area, you may have value hunters coming back in, especially as the 50 day EMA is reaching towards that same level.

GBP/JPY Video 17.02.22

To the upside, if we can break above the ¥158 level, then this market could become more of a “buy-and-hold” situation. We probably need more “risk on” in order to make that happen, especially as the area above that is offering resistance is so important on longer-term charts. If we were to finally get above there it is likely that we could go much higher over the longer term, as this pair does have the ability to really take off in long spurts.

Right now, there is far too much in the way of confusion to get this market moving rapidly, so at the end of the day what we desperately need is some type of clarity in order to make this market start trending again. At this point, it is obvious that there are plenty of buyers and that probably has a lot to do with the Bank of England looking hawkish more than anything else.

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