The British pound has gone back and forth during the trading session on Tuesday as we continue to bounce between the 50 day EMA on the bottom, and the 200 day EMA on the top. That being the case, I think this is a market that’s going to continue to be very noisy and difficult to deal with, but overall I do think that the pair is trying to make a major decision as we have seen so much in the way of headline risk out there when it comes to the Brexit and of course the UK parliament itself.
GBP/JPY Video 06.02.19
I do recognize that breaking above the 200 day EMA would be a bullish sign but we also have the ¥145 level above that could cause major problems. That being the case, I do think that it’s only a matter of time before we see back and forth choppiness lead to an explosive move. We should get a headline sooner or later that tells us which direction we want to go, and once we do it should be rather obvious because it will be an impulsive candle stick to say the least.
If we break down, I believe that the ¥140 level above will be massive support, so I think that the downside is probably somewhat limited after the “V” recovery that we have seen on the chart. These things typically don’t suddenly die off, and if there’s any good news coming out of the Brexit that might be all it takes to start going higher again.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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