The GBP/JPY pair has broken down during the session on Thursday, slicing through the 142.50 support level. Now that we have done this, the market looks ready to go much lower, perhaps even down to the 140 handle over the next several sessions. I believe that short-term rallies are selling opportunities, and I will continue to use them as such. The Japanese yen continues to enjoy significant strength, and because of this I think that the market will eventually go looking for that significant 140 handle. Because of this, it’s likely that we will see quite a bit of volatility and perhaps selling strength. The British pound has a certain amount of risk attached to it, mainly because we have so many questions when it comes to the exit out of the European Union. Because of this, this pair tends to be essentially under more fire than other young related pairs, because there are other factors as well. Ultimately, I believe that this pair does breakdown, but regardless it’s going to be very difficult to trade and of course very dangerous. Smaller positions will need to be used in my estimation to make this a tradable instrument.
GBP/JPY Video 11.8.17
This article was originally posted on FX Empire