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British pound rolls over against Japanese yen during tough Thursday session

By:
Christopher Lewis
Updated: Jun 1, 2018, 04:34 UTC

The British pound did rally a bit during the trading session on Thursday, reaching towards the ¥145.50 level, but broke down below in reaction to fears coming out of the United States applying tariffs to the European Union, Mexico, and Canada. Fears of retaliation have put a bit of a “risk off” vibe into the marketplace.

GBP/JPY daily chart, June 01, 2018

The British pound rallied a bit during the trading session on Thursday, reaching towards the ¥145.50 level, and then rolled over as it was announced that tariffs are coming out of the United States, reaching towards the Canadians, Mexicans, and the Europeans. I believe that has a lot of people concerned about potential retaliation, and that of course can give a bit of pause when it comes to people looking to invest. That has people buying the Japanese yen, as a closeout risk appetite based positions. I think that the ¥144 level underneath is going to offer support, but if we can break down below that level it’s likely that we could go lower, perhaps reaching towards the ¥143.50 level. Otherwise, we could bounce back towards the highs of the day, but that would be a simple consolidated move continuing itself.

Longer-term, this is a market that has been struggling, and I think that it’s only a matter of time before the downtrend continues itself. The previous uptrend line has been broken and it does suggest that we have a lot of negativity in this market. I believe that there are far too many geopolitical concerns out there to lift this market for the longer-term, so I look at rallies as potential value plays for sellers looking to get the Japanese yen “on the cheap.” Overall, I’m a net seller in this pair.

GBP/JPY  Video 01.06.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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