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Christopher Lewis
GBP/JPY daily chart, May 10, 2019

The British pound fell against the Japanese yen during the trading session on Thursday to kick off the day, but it looks as if we are going to continue to see interest in this area based upon the short term charts. The question now is whether or not the markets can stabilize after the drama involving the US/China trade relations, and that of course could continue to be a main driver of volatility in this pair. Remember, it is highly sensitive to risk appetite and that of course is the biggest game in town right now.

GBP/JPY Video 10.05.19

All things being equal, if we break down below the ¥142 level, then we could reach towards the ¥140 level below. That’s an area where the support is even more extraordinarily important, so unless we get some type of major break down, it’s very likely that this pair won’t be able to break below that level. At this point, it’s simply a function of whether or not risk appetite is good or bad, and it tells us which direction this pair should go. Because of this, it’s very likely that we are going to see a lot of choppiness, perhaps followed by a bit of serious momentum. With that in the back of your head, you should keep your position size rather small, and then add as the momentum picks up as it will become much more obvious as to where we could go next. That being said, I do think that it’s only a matter of time before people start to pick up value here.

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