GBP/JPY Price Forecast – British Pound Plows Into ResistanceThe British pound rallied rather significantly on Monday, slamming into the ¥136 level. However, this is an area where we have seen a lot of selling pressure.
The British pound slammed into the ¥136 level during the trading session on Monday to kick off the week with more of a “risk on vibe.” However, the ¥136 level is most certainly an area where we have seen a lot of selling, and a major inflection point over the last couple of weeks or so. You can see that several of the candlesticks leading to the breakdown were shooting stars, so there is obviously a lot of sell orders in that general vicinity. This leads the markets to interesting point, because we will probably make a rather significant decision in this general vicinity.
GBP/JPY Video 29.09.20
Keep in mind that the 200 day EMA is just above, so that offers a certain amount of resistance as well, and therefore should be paid attention to. You could make an argument for the “death cross” with the 50 day EMA crossing below the 200 day EMA here soon, but most of the time that signal is rather late. The market will continue to move based upon risk appetite in the latest Brexit headline, so that something that needs to be kept in the back of your mind as well. It certainly looks as if it is favoring the downside, so I would expect a “sell the rallies” type of attitude to enter this market rather quickly.
With the United Kingdom also talking about locking down parts of the economy, that cannot possibly have a positive effect on the British pound as well. In fact, quite a bit of what has sent the British pound higher during the day was a Bank of England member denying any talk of negative interest rates. At the end of the day, has anything really changed?
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