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Christopher Lewis
GBP/JPY daily chart, October 25, 2019

The British pound has gone back and forth against the Japanese yen during the trading session on Thursday, dancing around the psychologically and structurally important ¥140 level. This is an area that looks as if it is going to continue to attract a lot of attention, which makes sense as it is such a large, round figure. Beyond that, the market looks at this as an area of interest due to not only the 200-day EMA being underneath, but also the 61.8% Fibonacci retracement level offering resistance. In other words, this is exactly where you would expect to see the market put up some type of fight. Because of this it’s crucial to be patient and wait for some type of impulsive candlestick to get involved. At this point, it does look as if buyers have the upper hand longer-term, but short-term it looks as if we need to see a bit of digestion to say the least.

GBP/JPY  Video 25.10.19

If that’s going to be the case, then it’s crucial that you pay attention to the next impulsive candlestick. That will be your clue as to where this market goes next. If the market were to break down below the 200-day EMA, that would be a very bullish sign, sending this market towards the 100% Fibonacci retracement level longer-term, which is closer to the ¥149 level. At this point, expect a lot of choppy and back and forth trading, but give it enough time we should see an impulsive candle to follow.

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