This market looks a bit weaker than the GBP/USD market, which tells me that we are focusing on a couple of different things here. At this point, I believe that the biggest difference in this pair than the GBP/USD pair is the trade frictions between the United States and China. The market continues to be very nervous, but if we can break above the top of the shooting star for the week, that would be a very bullish sign, and should send this market looking towards the ¥148 level. Ultimately, I think this market will rally, with the 140 young level offering major support. However, if we break down below there that would mean further deterioration in negotiations between the Americans and the Chinese, which is always a stringent possibility. That opens the door to the 61.8% Fibonacci retracement level at the ¥137 level. A break down below there would send this market relaying back to the lows.

If we do rally, it’s good to take some time to get to the highs, which I currently have marked as ¥155.50. Clearing that level would be the next impulsive wave higher. Overall, I do favor the upside longer-term, the question is whether or not we can get either good headlines to make that happen, or do we need to wait for them to happen later down the road? I believe that the volatility continues but eventually once things get settled between the Americans and Chinese, this is a market that should go much higher.

GBP/JPY  Video 03.09.18

This article was originally posted on FX Empire

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