The British pound has fallen again, as we continue to see a lot of questions about the Japanese yen and the Bank of Japan itself. With this, it is imperative that traders watch for Japanese headlines.
GBP/JPY
The British pound has broken back and forth during the course of the trading session on Tuesday as we are just killing time here. We are trying to figure out where we are going to go next. We are dancing around sideways just above the 50-day EMA, but it's worth noting that the British pound is being propelled higher in general against many currencies due to the interest rate differential.
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Bank of Japan Intervention and Position Sizing
That being said, though, this is a little bit different in the sense that the market is facing a lot of questions about whether or not the Bank of Japan is going to intervene again. After all, intervention by the Bank of Japan has been rather brutal recently, and with that being the case, you need to be very cautious at this point. Ultimately, this is a market that continues to see a lot of upward pressure, but I also recognize that the market still sees a lot of support at the 215 yen level. The 215 yen level is an area that previously had been resistant.
The 219 yen level above has been a massive resistance barrier, and I do think that eventually we try to grind to the upside, but it is worth noting that there is that fear of the Bank of Japan intervening.
Because of this, I keep my position size reasonable in the yen-denominated pairs, with the exception of dollar/yen; I've been in that for several months. This one I like as well, but it's a smaller position for me. Ultimately, this is a market that I'm still bullish on, with that one exception that could cause a bit of a wiggle here and there.
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