- The British pound initially pulled back just a bit during the course of the early hours on Wednesday only to turn around and show signs of life again.
- Ultimately, I think this is a market that will eventually try to break well above the recent high and given enough time I think we also go looking to the 205 yen level.
- This is an area that I think will be interesting to watch, but there if nothing inherent about it that means it should be the “final ceiling.”
Underneath we have the 200 yen level that I think offers quite a bit of support. And if we were to break down below there, it's likely that we could go down to the 198 yen level where I think a lot of people will be very interesting. And the 50 day EMA is starting to race towards that area as well.
Top Regulated Brokers
Keep in mind that the British pound pays much more in the way of interest than the Japanese yen does, but with this being the case, the Bank of England meeting on Thursday will have a major influence on where we go next. With that being the situation, I would expect volatility, but any type of knee-jerk reaction will more likely than not open up the possibility of finding cheap pounds.
Bank of Japan Helpless
The Bank of Japan is nowhere near tightening monetary policy. So, I think you've got a situation where market participants will continue to see this on the prism of it being very noisy. And with that being the case, you need to be somewhat cautious with your position sizing. Nonetheless, the trend in this pair is dead obvious and there's no reason to fight it. I think given enough time; traders will continue to push this pair higher as the Bank of Japan just simply has far too much debt with the Japanese government to start tightening monetary policy. I think the Japanese yen will lose much more value before it's all said and done.
Ready to trade our daily Forex analysis? Check out the best forex trading company in UK worth using.