- The British pound has been all over the place during the early hours on Thursday as we continue to see a lot of noise.
- That being said, I think we've got a situation where we are approaching pretty significant support and I do think that it is probably only a matter of time before we turn things around.
- The 50 day EMA sits at roughly 191.5 yen and in that scenario, I think we could see a little bit of profit taking.
- Nonetheless, this is a market that I think has seen a little bit of intervention, but that intervention won't change anything in the longer term.
Interest Rates Matter
The interest rate differential alone will keep a floor under this market, so I'm looking for a reason to start buying. Technically speaking, I don't really have it yet, but somewhere between here and the 50-day EMA, I will start to put together the ideas of going long. Even if we did break down below the 50-day EMA, I would anticipate that the 190 yen level also comes into the picture for support as well.
Alternatively, if we turn around and break above the top of the candlestick for the day on Thursday, which would be quite a bit of effort, that would be very strong, and I think at that point you would start to see some FOMO enter this market. We did touch the 200 yen level over the last couple of days and I think we do return to that area eventually. That being said, you are going to have to be very patient here because of the shocks in the market over the last couple of days. Regardless, I have no interest in shorting and I'm looking for value.
At this point, I think there has been quite a bit of noise in this market, and I think it’s probably only a matter of time before we turn things around and continue the overall long-term trend that we have been seeing for so long. Remember, trends happen for a reason, and you get paid at the end of every day.
Ready to trade our daily Forex forecast? Here’s a list of some of the top forex brokers UK to check out.