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Christopher Lewis
GBP/JPY

The British pound has gone back and forth during the trading session on Friday, as we continue to look at the ¥135 level underneath with interest. That is an area that has previously been both support and resistance, and of course it is a large, round, psychologically significant figure. Because of this, it is likely that we will see a lot of choppiness in this general vicinity. As we head into the weekend, it is also worth keeping in mind that it is difficult to put a lot of money into the market when there are so many headline risks out there.

GBP/JPY Video 19.10.20

Looking at the chart, if we were to break down below the ¥135 level it is likely that we will see the ¥133 level being targeted. If we break down below there, then the market is very much likely to go towards the ¥130 level. Alternately, the ¥138 level above has been a significant amount of resistance and therefore I think that if we do get a bit of a bullish run, it will probably test the ¥138 level.

If we can break above there, then the market goes looking towards the ¥140 level without much discard. Ultimately, the market is likely to be very erratic, because quite frankly there are so many headline risks out there ranging from Brexit to the overall economic outlook for most of the globe. The choppy behavior makes quite a bit of sense, and it is worth noting that in theory we could be looking at a potential “higher low”, but it still a bit early to make that decision or claim.

For a look at all of today’s economic events, check out our economic calendar.

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