(MENAFN- Daily Forex)

• The British Pound has rallied nicely against the Japanese Yen during the trading session as the 50-day EMA looks like it is offering a bit of support.
• That being said, keep in mind this is a pair that's highly sensitive to risk appetite and therefore I think you have to watch what other markets are doing.
• The most obvious level on this chart is going to be the 200 yen level, an area that has been like a brick wall, if we can break above there finally, and continue to go higher, it could lead to a massive shot to the upside.

If we were to break down below the 50 day EMA that could send the British pound down to the 196 yen level, possibly even as low as the 200 day EMA which is underneath there. So that being said, I think you've got a situation where we are at an inflection point. But we are also in a bullish trend that is now pressuring a major barrier.

On a Break Above 200

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If we can get beyond that barrier, you will probably see the Japanese yen get eviscerated by almost everything else around the world as well. It probably won't be just a British pound thing. That being said, Friday has the speech by Jerome Powell and that of course will make a certain amount of sense that it could cause some noise.

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And with this, I think you have to understand that traders are looking for some type of clarity on what the Federal Reserve will do and therefore what risk appetite might be due to monetary policy.

EURUSD Chart by TradingView

Ultimately, this is a market that I think will be very volatile, but that's typically the case here with this pair anyways. I still favor the upside, but we obviously have a huge mountain to climb just above at this big figure.

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