The British pound struggles against Japanese yen again on MondayThe British pound tried to rally a bit during the session on Monday but continues to struggle every time we approach the 150 handle. I believe that this market is telling us that something is wrong out there as far as risk appetite is concerned, especially considering that the weekly chart has formed 3 shooting stars in a row.
The British pound tried to rally initially on Monday but continues to find the 150 level to be a bit too resistive to continue going higher. I think that the market will roll over significantly and sell off drastically at the first signs of trouble. I believe that the jobs number coming on a Friday could have a major influence as well, so any “risk off” move will have this market looking at a much lower levels. Technically speaking, I think that the market could drop down to the 145 handle if we have some kind of “risk off” issue, which is very possible given the geopolitical situation that we find ourselves in.
The trading conditions will continue to be very difficult as well as news sensitive. The overall attitude of markets in general will continue to be in flux. I believe that the next several sessions could be difficult, but when I look at the longer-term charts I think that we will eventually get a significant move. Simply put, if we break down below the bottom of a couple of these weekly shooting stars, it’s likely that we will see this market unwinding rather rapidly, and it should be influenced by some type of negativity. The alternate scenario of course is that we make a fresh, new high, breaking above resistance and go looking towards the 155 handle if there is some type of positive news.