The British pound initially tried to rally during the trading session on Tuesday but then broke down from the ¥133.27 level. At this point, the market looks as if it is running toward the downtrend, and at this point the overall monetary flow continues to reach towards safety. This was really kicked off as the ISM numbers in the United States came out weaker than anticipated.
The Japanese yen picked up a bit of value during the trading session as people ran for cover. The pair of course also has the added bonus of dealing with the Brexit, and that of course is still a major mess. With that being the case it’s a bit of a “perfect storm” for negativity.
Looking at the chart, the market has broken below the 50 day EMA and that should send fresh sellers into the pair. At this point, the market is likely to go down towards the ¥130 level, perhaps even down towards the ¥127 level after that. Rallies continue to be selling opportunities, and the most recent overextension was to the 38.2% Fibonacci retracement level where sellers step in rather abruptly and pushed. That also coincided quite nicely with the ¥135 round figure. At this point, there is nothing on this chart that suggests you should be buying. Most traders will look for short-term rallies that they can fade into, as this market most certainly has more downside ahead of it. That being said, the “easy money” shorting the British pound has probably already been made though, as the downtrend is relatively “long in the tooth.”
The candlestick of course looks very negative, and as the market attacks this little cluster of support, it’s very likely that it will give way, and clearing of the ¥131.50 level could accelerate the downtrend even further, at least for the short term. Currently, the ¥1.3350 level looks to be short-term resistance.
The Japanese yen picked up a bit of value during the trading session as people ran for cover. The pair of course also has the added bonus of dealing with the Brexit, and that of course is still a major mess. With that being the case it’s a bit of a “perfect storm” for negativity.
Looking at the chart, the market has broken below the 50 day EMA and that should send fresh sellers into the pair. At this point, the market is likely to go down towards the ¥130 level, perhaps even down towards the ¥127 level after that. Rallies continue to be selling opportunities, and the most recent overextension was to the 38.2% Fibonacci retracement level where sellers step in rather abruptly and pushed. That also coincided quite nicely with the ¥135 round figure. At this point, there is nothing on this chart that suggests you should be buying. Most traders will look for short-term rallies that they can fade into, as this market most certainly has more downside ahead of it. That being said, the “easy money” shorting the British pound has probably already been made though, as the downtrend is relatively “long in the tooth.”
The candlestick of course looks very negative, and as the market attacks this little cluster of support, it’s very likely that it will give way, and clearing of the ¥131.50 level could accelerate the downtrend even further, at least for the short term. Currently, the ¥1.3350 level looks to be short-term resistance.