(MENAFN- Daily Forex)
The GBP/JPY has exhibited a back-and-forth motion against the Japanese yen during Wednesday's trading session, signaling attempts at overall stabilization. The ¥180 level underneath is crucial, being a large, round, psychologically significant figure and a hub of past action. This level could invoke a certain amount of“market memory,” but a breakdown below could potentially trigger further selling, possibly leading the market to the ¥175 level, aligning with the 200-day EMA in that area.
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Conversely, a rally from the current position could face short-term resistance from the 50-day EMA . A breakthrough above this point could set the market on a path to the ¥185 level. Given the longer-term uptrend, signs of revitalization are anticipated. The British pound, currently oversold against the US dollar, might experience a short-term bounce soon.
The market is expected to witness substantial volatility, but stabilization in the uptrend against the Japanese yen is likely, with the British pound eventually joining in. Despite the recent pullback, longer-term charts reveal substantial buying underneath, making shorting this market almost impossible unless there is a significant policy shift from the Bank of Japan.
Investors with a longer-term perspective continue to benefit, but the recent pullbacks have posed challenges. The focus is on finding opportunities to go long, although the right conditions are yet to materialize. Shorting this pair doesn't hold interest, given the inherent risks and the prevailing market conditions.The Pound is Stabilizing
The British pound is navigating through a phase of stabilization against the Japanese yen, with significant levels and EMAs playing crucial roles in determining market movements. The ¥180 level is pivotal, with potential movements above or below this point shaping the market trajectory. The longer-term uptrend suggests a likelihood of revitalization, with substantial buying support underneath.
Traders must be cautious about the overall issues in the markets, but the Bank of Japan continues to stay very loose with its policy, as the debt in Japan cannot be financed with higher rates for long. The Japanese issue is one that is well-known, and therefore the pair will eventually rise. However, the occasional pullback makes sense, which is what we are going through at the moment. I am looking to value, and therefore am a buyer once the momentum turns around. The market should be approached slowly and then added to once the long position works for you.
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