British Pound Recovers Against Yen After Initial Selloff

The British pound initially fell during the trading session on Tuesday as we see a lot of “risk off trading” around the world. However, we have turned around to see a bit of recovery after sanctions by the West against Russia seemed mild in retaliation. In other words, it is likely that we will see the West lot Russia have whatever they want given enough time.

GBP/JPY Video 23.02.22

That being said, it should be noted that the pair had been rallying to begin with, so it is not a huge surprise to see that the buyers would step back in and try to pick this up. Because of this, it still remains a “buy on the dips” type of scenario, but that does not necessarily mean that you jump in with both feet every time we get a move. You have to be cautious with your position size, simply because we have so much in the way of noise out there. With that in mind, I think you have to be cautious, but you still have to look at the longer-term chart and pay attention to the ¥155 level.

Looking forward, it more than likely will continue to be a market that sees the ¥155 level as support, while the ¥158 level continues to be massive resistance. With that in mind, I am going to look it dips as a potential opportunity but if we were to break below the ¥155 level, then it might be time to step back and let the market stabilize before being involved again. Remember that the Japanese yen is considered to be a massive safety currency, so you need to pay close attention to what is going on around the world.

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