The British pound fell to kick off the trading session on Monday as traders took cover. The UK has locked itself down due to coronavirus mutations and of course people panicked from the start of the day. The market hit all the way to the 200-day EMA before rebounding. The candlestick is starting to look a bit like a hammer, so I think we will find some value hunters entering this market.
GBP / JPY Video 22.12.20
Keep in mind this is holiday trading so the liquidity is of course very thin which will lead to some erratic moves as we saw at the start of Monday’s session. The ¥ 140 level above has been massive resistance and as a result I think it continues to offer a bit of target. I think at this point if we were to reverse a breakout there, that would be an extraordinarily bullish sign after what we saw. Remember they are still talking about Brexit, and it continues to give the market some hope.
The British Pound continues to generate a lot of hope, as every time it sells, there seems to be a reason to go long. Remember, all it would take are some good headlines coming out of Brexit negotiations to send the British pound higher, and maybe some think that with the massive damage to the economy, they might be a little quicker to strike a deal at this point. At this point, it’s basically anyone’s guess.
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