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Christopher Lewis

The British pound rallied a bit during the trading session on Tuesday, reaching towards the ¥135 level. The ¥135 level has offered both support and resistance in the past, and the fact that we are somewhere between the 50 day EMA and the 200 day EMA suggests that we are probably going to find resistance due to that as well. Ultimately, if we do break above the ¥135 level, then we could go looking towards that 200 day EMA.

GBP/JPY Video 08.07.20

On the other hand, if we find a bit more in the way of “risk off” trading, it is likely that the pair will rollover again and go looking towards the 50 day EMA again. That area should offer support, but if we break down below there, then we will go looking towards the ¥132 level. One thing that should be noted though is the fact that the lows continue to get higher, so that is a sign that the market is trying to rally to the upside.

Pay close attention to the ¥135 level, it is an area that could determine whether or not we are going to run into more upward momentum, or if it is time to pull back yet again. All things being equal, I think the one thing you can count on its a lot of choppiness but we are most certainly at some type of inflection point and therefore we will probably have a decent move sooner or later but it may take a couple of days.

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

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