- In Monday's trading session, the British pound exhibited some upward momentum against the Japanese yen, amidst a backdrop of market volatility.
- While the trading environment remains noisy, there are indications that the pound could ascend further, possibly targeting the ¥185 level.
- This is an area that will undoubtedly offer a juicy target for those bullish to be interested in. The market will continue to look at this as a potential area of interest.
The ¥185 level has previously acted as significant resistance, making it a logical target for the pound's upward movement. It's important to note that the overall market trend remains in an uptrend, suggesting a continued upward trajectory. The Bank of Japan's efforts to curb rising interest rates in the country further reinforce this outlook. Consequently, traders are likely to adopt a "buy on the dip" strategy whenever opportunities arise.
Beneath the current levels, the ¥180 mark holds significance, not only due to its psychological appeal but also because it recently provided support. Traders tend to remember such key support levels, making them potential reference points for future decisions. While a breakdown below ¥180 might bring the 200-Day Exponential Moving Average (EMA) into focus, such a scenario seems unlikely at present. Market momentum plays a substantial role, particularly during periods of occasional panic announcements.
Be Cautious
It's essential to acknowledge that this currency pair is highly sensitive to shifts in risk appetite. Therefore, risk sentiment will continue to influence its movements. The market is currently characterized by considerable volatility, which can present its own set of challenges. Traders must exercise prudent position sizing to navigate this environment effectively. The market can be very volatile, so you need to make sure your position size is appropriate in this environment. I think this is the only thing that we can do now.
In the end, the British pound's recent rally against the Japanese yen signals strength in the currency pair. The ¥185 level serves as a potential target, underpinned by the Bank of Japan's efforts to maintain low-interest rates. While risk appetite remains a factor, the market's overall uptrend and momentum favor the pound's performance. However, it's important to approach this currency pair with caution due to the prevailing volatility and consider risk management strategies when trading it.
Ready to trade our Forex daily forecast? We’ve shortlisted the best regulated forex brokers UK in the industry for you.