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Christopher Lewis
GBP/JPY daily chart, August 08, 2019
Close-up of 10,000 Japanese yen bills

The British pound breaks down yet again against the Japanese yen as we continue to see more of a “risk off” move in the markets, as people flood to the safety of the Japanese yen. Overall, this is a market is in a downtrend for several different reasons, not the least of which is the Brexit. We are nowhere closer to a solution with the Brexit than we have been in the past, so I don’t see that the British pound is going to rally significantly. Even if it did, without some type of Brexit deal I think it would be a sellable event.

GBP/JPY  Video 08.08.19

Beyond that, the market is reacting to the global concerns about growth and of course trade wars, so I think at this point it makes sense that the British pound continues to start falling yet again. At this point, the market looks likely to go down to the one ¥25 level, perhaps even lower than that. Rallies at this point can’t be trusted, and even if we did break higher, I believe that the ¥132 level is the next resistance barrier that’s going to be difficult to break. We have the 20 day EMA in that region, so I would fully anticipate quite a bit of pressure in that region. This is a market that continues to fall precipitously, so the fact that we are shopping around right now makes sense that we are about to see yet another breakdown. All things being equal, I’m a seller and have no interest in buying until we get a resolution to the Brexit.

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