The British pound has broken down significantly against the Japanese yen during the trading session on Monday as we continue to see a lot of concern around the world when it comes to the coronavirus and lockdowns around the world. People are starting to worry about the reopening trade in a big way, which of course has people looking towards safety currencies and assets. The Japanese yen is one of the “safest currency is in the world”, so it does make quite a bit of sense that we have broken down the way we have.
GBP/JPY Video 20.07.21
The ¥150 level of course is a large, round, psychologically important figure, and if we break down below here significantly it could lead to a major turnaround, perhaps opening up another 500 pips to the downside. Nonetheless, this is a market that I believe continues to see a lot of noisy behavior to say the least, but it certainly looks as if it is threatening the downside more than the op at this point. In fact, I do not have a scenario in which I am comfortable buying this pair anymore, as the move on Monday was so vicious.
I think rallies continue to get sold into, as we are starting to see a lot of fear around the world, and quite frankly it is going to take a couple of very positive days for me to get involved in this pair, which I would of course let you know about here at FX Empire. At this point, the pair looks very threatened to the downside, and I just do not see that changing anytime soon.
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This article was originally posted on FX Empire
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