The British pound has initially fallen during the trading session on Monday but turned around to show signs of life again. By doing so, it looks as if we are pressuring a major resistance barrier, as it is at the top of the longer-term range. Because of this, the market is more likely than not going to continue seeing hesitation, and with that being the case I am a bit cautious about buying on the way appear. After all, the last thing I want to do is buy this market at the top.
GBP/JPY Video 22.03.22
The ¥155 level underneath will more than likely be an area of support, assuming that we even pull back that far. On the upside, the ¥158 level is an area that has seen a lot of resistance, so I think it might be a bit of a fight to get above there. If we do, then the market is more likely than not going to end up being a major “buy-and-hold” type of asset. This would be very “risk-on”, so pay attention to risk appetite around the world. Remember that the Japanese yen is considered to be a safety-related asset, so obviously if traders are buying this market, that means that they “feel good” about putting money to work.
Alternately, if we start to see stock markets and the like falling apart, then in theory the Japanese yen should start to strengthen, causing this market to fall. If the candlestick remains as it looks right now, a break down below the bottom of the candlestick for the Monday session would end up forming a “hanging man”, which is a bearish signal.
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This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/british-pound-continues-pressure-resistance-131024792.html