GBP/JPY Price Forecast – British Pound Still Noisy

The British pound initially tried to rally during the trading session on Tuesday but gave back the gains to fall back into the 50 day EMA, as well as the 200 day EMA. Perhaps this is in reaction to the European Union suggesting that they were more than willing to call the bluff of the United Kingdom as far as an October 15 deadline for a trade deal was concerned. This had negative effects on the British pound, but at the end of the day we are simply retesting an area that had been previous resistance.

GBP/JPY Video 07.10.20

It is worth noting that the ¥136 level underneath has held, and of course the ¥135 level underneath there is even more supportive. If we can break above the highs of both Monday and Tuesday, that allows this pair to continue going higher. Another thing to keep in mind is that the pair is very sensitive to risk appetite, so this could have a lot to do with where we go next. If suddenly “everything is awesome” in a variety of global markets, then under normal circumstances, that should send this pair higher.

Obviously, the exact opposite is true as well. I believe that we are at a bit of a crossroads though because we had such a brutal selloff in this pair previously. As for myself, I am simply steering clear of this pair because I see that it would not take much to move the market 100 points based upon the latest rumor, headline, or worse yet: Tweet.

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