British Pound Spikes Against Japanese Yen

The British pound has spiked against the Japanese yen during the trading session on Monday to pierce the ¥155 level. That of course is a large, round, psychologically significant figure, and therefore it is likely that we will see a bit of noise in that general vicinity. Whether or not we can continue to go higher is a completely different question, because we have certainly paused near this area more than once. I do think that we have a bigger decision to make, as this pair is so highly sensitive to the risk appetite of the markets in general.

GBP/JPY Video 01.02.22

If we do break out to the upside, then it is likely that the ¥158 level will be where we run into serious trouble. On the other hand, if we break down below the bottom of the candlestick and the 50 day EMA on a daily close, that sends this pair much lower levels. At that point in time, the market is likely to go looking towards the ¥153 level, followed by the ¥152.50 level. As long as there is a lot of fear in the marketplace, there is a decent chance that this could happen.

I would expect a lot of volatility during the week, especially as the Bank of England has an interest rate decision, but quite frankly biggest way you can avoid getting blown out this week is probably going to be keeping your position size reasonable. That is by far the best thing you can do in extraordinarily volatile times like we have been in.

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