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Christopher Lewis
GBP/JPY

The British pound has initially tried to rally during the trading session against the Japanese yen on Wednesday but continues to see the ¥140 level as an area that is very difficult to crack. I do not think we get above there until we get some type of Brexit news that is positive and perhaps even more importantly, substantial. Because of this, I think that we continue to see occasional dips that people will be looking to pick up. The 50 day EMA underneath will course be an area where a lot of people pay attention, as it is now near the ¥137 level. Ultimately, this is a market that I think given enough time has to make a longer-term decision.

GBP/JPY Video 26.11.20

There are a lot of traders out there that have priced in the possibility of a Brexit solution within the next week or so, but recent comments coming out of the French suggests that perhaps we are still struggling to move forward. If that is the case, it is going to be very negative for the British pound. Because of this, it is very likely that we will continue to see ¥140 as a crucial level. I also recognize that there is a high probability that between now and the resolution of Brexit we are simply range bound, perhaps in a 300 point area.

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Keep in mind that this pair is also sensitive to risk appetite but having said that, if you are looking to trade a currency against the Japanese yen based upon a “risk on” world, you are probably better off doing it with one of the Antipode currencies.

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

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