British Pound Recovers at 200 Day EMA

The British pound has bounced significantly against the Japanese yen during the trading session on Wednesday as we reached the 200 day EMA. Because of this, the market looks very likely to continue to see a lot of volatility in choppiness, especially as we are looking down the barrel of a lot of varying geopolitical events, and of course inflation.

When you look at the chart, you can see that the ¥152.50 level sits just below the 200 day EMA and is an area where we have seen a significant amount of buying pressure in the past. With that in mind, we likely continue to pay close attention to that region, as it is essentially the “floor of the market” currently.

GBP/JPY Video 03.03.22

If we do break down below that level, then we could go looking towards the ¥150 level, an area that has been important multiple times. That area would be difficult to break below, but if we did, it would be the absolute end of the uptrend.

On the upside, we have the ¥155 level offering significant resistance not only based upon the figure itself but the fact that the 50 day EMA is starting to curl lower. Breaking above there then opens up the possibility of a move towards the ¥157 level. All things being equal, keep in mind that this pair is highly sensitive to risk appetite, and therefore the fickle nature of the market will be reflected in this currency pair, thereby making it imperative that you keep up on risk appetite sentiment around the world via geopolitics, and stock indices as a proxy for how people are “feeling.”

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