GBP/JPY Market Continues to Be Very Choppy

The British pound has initially tried to rally during the course of the trading session on Friday as we continue to see a lot of noisy behavior overall. Ultimately, this is a market that I think continues to struggle overall, as there are so many different moving pieces at the same time when it comes to risk, and that of course will have a lot of consequences here as this pair is extraordinarily sensitive to risk appetite.

GBP/JPY Video 21.02.22

That being said, the ¥157.50 level above seems to be resistive, so I think it could be difficult to get above there in the short term. If we do, that would obviously be a very bullish sign and we could go much higher. To the downside, we have the ¥155 level underneath offering support, especially as the 50 day EMA is currently crossing that level. If we were to break down below all of that, it could open up a floodgate of selling, but right now I think that is very unlikely. If we did break down below there, then I believe that the ¥150 level could be the next target.

Keep in mind that the pair is highly sensitive to risk, so you will have to keep on top of geopolitical issues, and of course what they are doing in other markets when it comes to taking risk, because it will give you an idea as to whether we go higher or lower. The Japanese yen is considered to be the “ultimate safety currency”, so if we do get a bit of a risk off type of scenario, this pair will fall, and of course vice versa.

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