The British pound has fallen hard during the course of the trading week against the Japanese yen in a major “risk-off” move, which of course is something worth paying attention to as global markets, in general, have been in trouble. We even have the market gapping lower to kick off the week, before filling the gap and then falling apart. The ¥155 level has been major resistance during the week, and if we do get some type of recovery, that will be a huge barrier to cross.
GBP/JPY Video 07.03.22
On the downside, the ¥150 level looks to be the most likely of targets, as it is an area of support from the previous trading. The question now is more or less going to be whether or not we can break through that area. I would consider that to be the case if we do in fact break down below ¥149, as this is a general “support area.”
The size of the candlestick tells you just how ugly things have gotten, and therefore I think we probably continue to see a lot of fear enter the marketplace. That fear will not necessarily be contained to just this currency pair, but it is a great proxy for everything else that you trade. The markets continue to be very noisy, and therefore you need to keep your position size reasonable. In fact, as a general rule, I have been trading about half the size that I normally do over the last couple of weeks as things have gotten so out of control. Until the geopolitical concerns and growth scare gets under control, this is a pair that is probably going to struggle.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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