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The British pound has been somewhat quiet during the trading session on Monday, as we continue to go back and forth and try to build up enough steam to break out above. I think the 150 level will of course offer a certain amount of psychological resistance, and I also see a bit of a “zone” of resistance extending to the 151 level. If we can break above that level, then I think we will pick up a lot of momentum, perhaps reaching towards the 155 level. That’s an area that will of course offer a lot of resistance, but I think it makes a nice target longer term.
The uptrend line underneath should offer support, and I believe that it’s not until we break down below the 148 level that I think the selling pressure will pick up again. Ultimately, I think that we will see a lot of correlation between the GBP/JPY pair and the overall risk appetite of markets, as per usual. I believe that the market will follow stock markets in general, especially the S&P 500 as it is such a great barometer for risk appetite.
If we get a “risk off” type of attitude, then this market could break down and I think would probably aim for 145, which should also be psychologically important and supportive. There’s also an argument to be made for structural support their based upon previous resistance as well.
GBP/JPY Video 20.02.18
This article was originally posted on FX Empire