The British pound looking for support against Yen
The British pound fell significantly during the trading session again on Monday and what would be a bit of a surprise due to a lack of volume. After all, this is the holiday season when “nothing happened.” As you can see on the chart, the 50 day EMA is starting to come into play, and that could cause a certain amount of support. Beyond that, we are sitting just above a bullish flag that attract a lot of attention as well.
In the middle that flag is the ¥140 level, and that will obviously be something to pay quite a bit of attention to as well. At this point, if the market was to give back and break down below the ¥139 level, that would be an extraordinarily negative sign. It seems as if people are now worried about a “hard Brexit”, as the British pound got hammered against the US dollar as well, so this isn’t just a run into the Japanese yen for safety. This is indeed a reaction to uncertainty in the United Kingdom and will probably continue to be a major issue. That being said though, as we go through the holidays if we can get a bit of stability in this general vicinity and perhaps even some good news, we could see the market turn right back around to reach towards higher levels.
That being said, if the market was to break down below the ¥139 level, then it’s likely that we could go looking towards the ¥135 level after that. At that level we should be looking at support again, but it would be extraordinarily negative to get there in the first place with that in mind, I would be very concerned about the pair and the general risk appetite out there if we do get to that vicinity.
In the middle that flag is the ¥140 level, and that will obviously be something to pay quite a bit of attention to as well. At this point, if the market was to give back and break down below the ¥139 level, that would be an extraordinarily negative sign. It seems as if people are now worried about a “hard Brexit”, as the British pound got hammered against the US dollar as well, so this isn’t just a run into the Japanese yen for safety. This is indeed a reaction to uncertainty in the United Kingdom and will probably continue to be a major issue. That being said though, as we go through the holidays if we can get a bit of stability in this general vicinity and perhaps even some good news, we could see the market turn right back around to reach towards higher levels.
That being said, if the market was to break down below the ¥139 level, then it’s likely that we could go looking towards the ¥135 level after that. At that level we should be looking at support again, but it would be extraordinarily negative to get there in the first place with that in mind, I would be very concerned about the pair and the general risk appetite out there if we do get to that vicinity.