- I’m looking at the British pound against the Japanese yen. You can see that Tuesday’s session was positive right away.
- It looks like we are in trouble near the 198.5 yen level or so I think it extends all the way to the 200 yen level.
- It’s worth noting that I still believe the US dollar is the strongest currency overall.
The British pound is essentially second, so this is a market that should continue to favor growth, given enough time, but that 200 barrier is extremely resilient. The question is whether someone is interfering here? The Bank of Japan, for example.
Bank of Japan, is that you?
They’ve been known to do that, so we’ll have to wait and see, but it looks like we’re giving back a little bit of those gains, and right now I think it’s probably a crash waiting to happen. The 50-day EMA is near the ¥195 level and rising. I think that is the short-term threshold in the market. As long as we can stay above, I think we’re probably still buying on the decline overall.
If we can climb above the critical ¥200 level, then this market is likely to scream towards the ¥207 level given enough time. I’m not a big fan of throwing a ton of money into this until we break above the 200 yen level, but I recognize that you will get paid at the end of each day and that will generally trigger the yen related pairs as carries come and go but eventually everyone likes it. If we were to turn around and break below the ¥195 level, then we need to start thinking about the 200-day EMA as the next support level. Anything below then we will likely open the door and fall towards the ¥190 level.
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