British Pound Struggling With 200 Day EMA Against Yen

The British pound has gone back and forth during the trading session on Thursday as we continue to fight with the 200 Day EMA. Ultimately, this is a longer-term technical indicator that a lot of people will pay attention to, as well as a trend-defining tool. The ¥152.50 level is an area just below that has been important more than once as well, so I think given enough time we will probably see both push and pull. All things being equal, I believe this is a market that is trying to recover but if we break down below the lows of the trading session, it is very likely that we had right back towards the lows.

GBP/JPY Video 11.03.22

Do not get me wrong. The bounce from here does not necessarily mean that we are going to change direction permanently, just that we had gotten a bit oversold. I do believe in shorting this pair because there are so many economic, geopolitical, and sentiment-related issues out there that could send this market right back down towards the safety of the Japanese yen.

It will be interesting to see others behave heading into the weekend because I can give you a clearer picture of how people feel about the overall situation because of holding a long position in this pair or not. If they are not willing to hold onto it, that tells you that we are still very concerned. All things being equal, I do not think this is a pair that rallies for a significant amount of time before the sellers show back up and push things lower yet again.

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