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Christopher Lewis
GBP/JPY daily chart, December 31, 2018

The British pound has broken below the ¥140 level during the day on Friday, as the level continues offer a lot of support. We have found this market to be relatively resilient in this area, so we may get a bit of a bounce. If we get a bounce from here, then it could offer an excellent selling opportunity above, especially near the ¥142.50 level. The alternate scenario of course is that we break down to a fresh, new low, and then the market could roll off down to the ¥138 level.

GBP/JPY  Video 31.12.18

We have been in a major descending channel for some time, and of course the 200 day EMA is starting to turn down just above the ¥145 level. This is of course one of the major indicators people use to determine trend, and it looks very much like the trend is negative. Because of this, I look for short-term rallies to sell as it gives me value in the Japanese yen, and it should be pointed that the USD/JPY pair has found the ¥110 level supportive and much the same way. I think the market is likely to see a lot of volatility, but I think it’s only a matter of time before we do break down. The British pound of course has to worry about the Brexit as well, so that will have a major influence on this market as there is a lot of uncertainty when it comes to the United Kingdom.

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