The British Pound has been sideways in general against the yen on Monday, as we continue to see risk appetite cause some issues for a lot of assets. The pound continues to pay you at the end of every day to hold it here.
GBP/JPY
The British Pound has gone back and forth during the early part of the trading session here on Monday as we continue to see a lot of volatile trading in general. Keep in mind this is a pair that is highly sensitive to risk appetite, and therefore you have to be very realistic about what’s going on around the world. While we had recently seen the British Pound really take off against the Japanese Yen, recently we’ve seen a little bit of hesitation.
Interest Rate Differential Favors the Pound
The 216 Yen level looks to be support from what I can see, with the 220 Yen level above being resistance. Overall, I believe this is a market that will do everything it can to try to get to the upside as the interest rate differential continues to favor the British Pound. And of course, the Bank of Japan itself has a lot of issues when it comes to debt and the inflationary situation perhaps cooling off just a bit in the Japanese economy.
So, with that, I like the idea of finding dips every time we get them, taking advantage of them, and I have no interest in shorting. In fact, I’m quite comfortable adding to an already long position in little bits and pieces because you get paid at the end of every day. If we can break above the 220 Yen level, I think at that point we can really start to take off. But as things stand right now, I think more of a grind is probably to be expected.
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Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire
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