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Christopher Lewis
GBP/JPY daily chart, May 14, 2019

The British pound has tested support for the last couple of days, and as it now appears shiny is raising tariffs in June, it has the market on a little bit of a “risk off footing.” With that being the case, the Japanese yen of course got a bit of a bid as people were concerned about global growth. In general, this pair tends to rise when things are going well and it tends to fall when they aren’t. Beyond that, we also have the Brexit which of course causes a lot of issues with the British pound in general, as we don’t quite know what to expect.

GBP/JPY  Video 14.05.19

All that being said, if we can recapture the ¥142.50 level, the market looks very likely to try to bounce again. The 38.2% Fibonacci retracement level also attracts a lot of attention, so keep that in mind. If we continue to go lower, and break down below the ¥142 level, then the market should go down to the ¥140 level. Ultimately, I do believe that there is some value to be found eventually, but that doesn’t necessarily mean that we have that right now. If we were to break down, it will probably be a quick flush lower, and then a recovery as we have seen several times in the past. The alternate scenario is that we break above the ¥143 level, and then go looking towards the ¥144.50 level. This market continues to be volatile, but that’s nothing new for this pair.

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