The British pound has been somewhat noisy against the Japanese yen during trading on Tuesday, but that will have been expected as the Bank of Japan and others have intervened.
GBP/JPY
The British pound has been somewhat noisy against the Japanese yen during trading on Tuesday, but that will have been expected as we’ve recently seen some form of intervention to favor the Japanese yen in order to combat some of the massive selling pressure that has been a mainstay here.
That being said, the British pound does look like it is fairly well supported at the 210 yen level, and not only is it seeing a bit of structural support as this was an area that was supported previously, we also have the 50-day EMA ranked there as well, which of course offers a significant amount of support.
Technical Support and Market Outlook
If we were to break down below the 50-day EMA, the 205 yen level could be the target, possibly even the 200-day EMA, which is currently trading at the 202.45 level and rising.
All things being equal, this is a market that I think remains very bullish, and of course you do get paid at the end of every day to hang onto it, so I’m still bullish on this pair. I also recognize that we need some of the noise to soften in the yen denominated markets overall in order to get large with the position.
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The US dollar is struggling quite a bit more against the yen than the British pound, but that makes sense considering the US dollar has its own concerns. That is why I’m focusing on this pair, because I’m trying to match up strength with inherent weakness. Yes, the central banks may have done something, but that’s not the sign of a strong currency; quite frankly, it’s mainly the opposite that it gives an impression of. All things being equal, this is a pair that I think will try to get to the 215 yen level eventually.
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