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Christopher Lewis
GBP/JPY daily chart, July 29, 2019

The British pound initially broke higher to the upside, and then turned around at the 20 day EMA. Look at this market it’s likely that the ¥135 level will be in the rearview mirror before it’s all said and done, as we have continued volatility. The market has been in a downtrend for some time, and quite frankly for good reason. The Brexit continues to weigh upon the British pound overall, and there seems to be no end in sight when it comes to the negative headlines. With that being the case it makes sense that we continue to drift lower.

GBP/JPY  Video 29.07.19

Beyond that, we have a lot of geopolitical concerns out there and that of course makes the Japanese yen attractive. With that being the case we should continue the overall negativity and drift towards the lows again. If we make a fresh, new low, then it’s likely that the that we continue to see this market reach towards the ¥133.50 level, the ¥130 level, and perhaps even lower. Ultimately, if we do break to the upside it’s very difficult to imagine a scenario where we could be buyers at this point. The ¥136 level should be resistance as well, and that being the case it’s very unlikely that we will be able to go higher for any significant amount of time. The ¥136 level being broken to the upside allows the market to reach towards the ¥137.50 level. Signs of exhaustion will continue to be jumped upon by most traders.

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