- The GBP/JPY initially pulled back during Wednesday's trading session, testing support underneath the 165 level.
- However, this level ended up being a launching pad, and the market has since seen a lot of strength.
- Despite noisy behavior, the market is bullish and continues to attract value hunters. The market is driven by the Japanese yen, making it a "buy on the dips" situation.
If the market breaks down below the ¥165 level, the 50-Day EMA could provide support. However, breaking below this level would be significant. Traders should pay close attention to risk appetite, which is likely to drive the market more than anything else. Currently, buyers are in control, and traders should look for value every time the market drops. The market is likely to experience erratic and noisy behavior, but it appears to be aiming for the ¥170 level, which would be a bullish sign if it is reached.
The 50-Day EMA is rising, but if the market breaks below it, traders could expect the market to drop down to the 200-Day EMA, which is near the ¥162.50 level and rising. While this is not very likely to happen, traders should keep this possibility in the back of their minds. The Bank of Japan is continuing its yield curve control policy, making it likely that the Japanese yen will remain soft against other currencies, especially as interest rates rise around the world.
The British Pound is Currently Bullish
Despite the market's bullish behavior, the British pound still faces some challenges. Brexit continues to impact the market, and it remains unclear how the situation will be resolved. Additionally, the ongoing US-China trade war is causing volatility in the global markets, which could have a knock-on effect on the British pound.
However, there are also reasons to be optimistic about the British pound's potential for growth. The UK economy is currently performing well, with unemployment at a historic low and wages rising at their fastest pace in over a decade. Additionally, the Bank of England has hinted at the possibility of an interest rate hike, which could provide a boost to the British pound.
At the end of the day, the British pound is currently bullish, and traders should look for value every time the market drops. While there are some challenges facing the British pound, there are also reasons to be optimistic about its potential for growth. Traders should pay close attention to risk appetite, as it is likely to drive the market more than anything else. Overall, the market is likely to remain volatile, and traders should remain vigilant and adapt their strategies accordingly.
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