British Pound Slams Into ¥155 Yet Again

The British pound has gapped lower to kick off the trading session on Monday in a big “risk off” type of move as the tensions between Ukraine and Russia have gotten worse, and of course sanctions on Russia have been rather serious. Because of this, the market is likely to see the ¥155 level as a barrier to overcome, which so far it has not. The fact that we pulled back from there should not be a huge surprise, considering that the 50 day EMA is sitting just above and is ready to curl lower. If we can break above it, that would obviously be a very bullish sign, perhaps opening up the possibility of going to the ¥156.50 level.

GBP/JPY Video 01.03.22

On the other hand, if we cannot overcome that barrier then it is likely that we could go looking towards the ¥153.50 level, and then eventually the ¥152.50 level where the 200 day EMA is currently sitting at. Breaking down below there would be a huge problem with risk appetite around the world, almost certainly sending this pair to the ¥150 level rather quickly.

We are overall in a bullish trend longer term, but at this point time it is likely that there will continue to be buyers on dips as the pair has been rather resilient. Ultimately, this is a market that I think continues to be very noisy, and of course is being pushed around by external forces such as Russia/Ukraine, central banks sanctions, and a whole litany of other issues. Ultimately, the market will continue to be one that you need to be cautious with but it is obvious that there is a lot of resiliency here.

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