The British pound drifted a bit lower during the trading session on Friday as we continue to wait for some type of resolution to the Brexit situation. As things stand right now, it looks like we are a bit cautious, and as a result the British pound has not turned around quite yet. That being said, there are signs of life underneath and of course the markets continue to see a lot of hope out there.
GBP/JPY Video 30.11.20
All things being equal, this is a market that I think has plenty of support underneath at the 50 day EMA, closer to the ¥138 level. At this point in time, the market should see people jumping back into the market as we are simply bouncing around in this general vicinity. This is a 300 point range that we are in, and I think that may continue to be the case until we get some type of resolution with Brexit. At this point in time, the market is likely to see headlines as reasons to move one way or the other, and I think as we are somewhat in the middle of the range, it is possible that we could go either way.
With that being the case, I believe that you are better off waiting until we get towards the bottom of the range or the top to place a trade. Having said that, it is very unlikely that trading the British pound is going to become easier anytime soon, but eventually we could get some type of resolution, allowing for clarity and a longer-term move.
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This article was originally posted on FX Empire