British Pound Trying to Recover Against Yen

The British pound has rallied a bit against the Japanese yen during the trading session on Tuesday in order to try to show signs of life. That being said, the market is still very bearish, and it looks to me as if the 200 Day EMA near the ¥152.50 level should offer a bit of resistance, not only due to the level being an area where we have seen quite a bit of noise before, but we also have the 200 Day EMA.

GBP/JPY Video 09.03.22

Keep in mind that this pair is very highly correlated to risk appetite, and with that being the case it is very likely that we will see this market all over the place due to the various issues around the world, and I do think that you need to look at rallies as a potential selling opportunity at the first signs of exhaustion. Quite frankly, I just do not see a situation where we would see the market take off to the upside unless of course there is some type of major development coming out of Ukraine, and even then, it would probably be a bit of a short-term opportunity more than anything else.

On the downside, I look at the ¥150 level as a major support level, as it is historically important, and of course is a large, round, psychologically significant figure. Just below the ¥150 level is a 100 points range-wide support area that extends down to at least the ¥149 level. Regardless, if we were to break down below there, it would open up a trapdoor for the market to go plunging much lower.

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