- During the trading session on Friday, the British pound initially rallied against the Japanese yen, breaking hard to the upside and above the crucial ¥190 level.
- The 190 and level is a large, round, psychologically significant figure, and an area that’s been important multiple times.
- However, we have since seen the British pound rollover quite drastically, as the risk appetite around the world has fallen apart.
- The Friday session has shown itself to be one of concerns, and it does make a certain amount of sense that this pair drops.
Technical Analysis
The technical analysis for this pair is rather ugly, but we also have a lot of support in this general vicinity, so it is worth paying close attention to. The ¥188 level is an area that I think will continue to be important as we had bounce from there previously, but now as we are starting to roll over again, it suggests that the market could very well break down. If we were to break down below the ¥187 level, then I think you could see the British pound break quite drastically lower. The ¥185 level would be my first target, followed by the ¥183 level.
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If we were to turn around and rally from here, we need to get a daily close above the ¥190 level to become bullish again, and one that does happen I think the market probably looks to the 50 Day EMA, which is closer to the ¥192.25 level. Anything above there would be very bullish, but we would also need to see the Japanese yen struggle against other currencies, not just the British pound. In general, I think this is a market that continues to be very noisy, but it certainly looks as if the sellers have the upper hand at this point, and I don’t know that it changes very easily.
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