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The British pound has gone back and forth against the Japanese yen during the trading session on Thursday as we are hanging around the crucial 50 day EMA. This of course is an area that a lot of people pay attention to, but at the end of the day I think what we have is a situation where the market is simply getting a little bit of a bounce after a massive selloff, meaning that given enough time we should see a nice selling opportunity. That being said, a little bit of patience may go a long way as we did fall quite significantly to get here.
GBP/JPY Video 28.01.22
The ¥155 level would be an area that I think I am interested in shorting signs of exhaustion, as it has been important a couple of times in the past. This of course assumes that we even get there, and in this type of environment, I think that the turnaround is going to be quite quick. I have no interest in trying to get long anytime soon, unless of course the overall risk appetite suddenly changes. Keep in mind that this pair is highly sensitive to risk appetite in general and in both directions. Risk appetite is getting crushed at the moment and therefore I just cannot get long anytime soon.
The market will continue to see a lot of noisy behavior, due to the fact that the markets have no idea what to do with themselves at the moment, as inflation is a problem and of course tighten monetary policy takes a lot of risk out of the market in general.
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This article was originally posted on FX Empire