The British pound went sideways against the Japanese yen for a majority of the session, but did get a bit of a reprieve early in the American session. The 145 level has offered a significant amount of resistance though, and we are currently seeing whether the market can continue to go higher. If it clears the 145.25 level, I think at that point the market can go much higher. However, in the meantime it looks like there is a lot to deal with, and perhaps the overall malaise in the stock markets could continue to pressure this pair to the downside.
Choppiness
This is a market that is going to continue to be very choppy, and quite frankly dangerous. Because of this, I believe in treating very small positions, because this pair can turn on a dime, and the next thing you know you could be breaking down significantly. The longer-term, we are forming a bit of an ascending triangle, but we are several handles from that being tested. Because of this, I think we may continue to see a bit of a “risk off” trade, without changing the overall general attitude of the market longer term. I believe that the British pound is going to continue to be soft overall, especially against safety currencies such as the Japanese yen. Selling rallies is probably how this plays out, but the most important thing that I would stress is that your position size should be uniquely small.
GBP/JPY Video 25.7.17
This article was originally posted on FX Empire