On Thursday, we saw a lot of support for the British pound against the Japanese yen, as it continues to slide overall in the forex markets.
GBP/JPY
During trading on Thursday, we've seen some noisy behavior in the British Pound against the Japanese Yen as we are hanging around the 218 Yen level. This is an area that's been important multiple times, and it is worth watching right now. Ultimately, short-term pullbacks, I think, are buying opportunities in a market that, quite frankly, continues to see a lot of volatility.
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The volatility in this market is one that I think will remain a major factor due to the fact that we have so many moving pieces out there that could have markets all over the place. After all, we have the war in the Middle East continuing to cause havoc with risk appetite, and of course, we have rates jumping not only in Great Britain, but also in the United States and everywhere else.
The Bank of Japan is essentially stuck. The US Dollar has broken to a fresh new high against the Yen, and that will drag the Pound with it given enough time. The 216 Yen level looks to be support. The 50-day EMA is approaching there as well.
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So, I think this is a market where you continue to buy dips on, and you continue to collect the swap at the end of every day. I have been short of the Japanese Yen against a couple of different currencies—this is one of them for some time now—and I will continue to add when I get the opportunity to pick up cheap currency, such as the British Pound against the Japanese Yen or the US Dollar against the Japanese Yen.
I have no interest whatsoever in shorting, and if the Bank of Japan does come into the picture and starts intervening, that's fine. I'll just buy it at lower levels.
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