- The British pound has gapped lower during the trading session on Monday against the Japanese yen and simply fell over again.
- All things being equal, this is a symptom of negativity around the world.
- Everybody is in a complete panic, and this continues to be a major influence on the markets.
As long as people choose to panic, they will probably be interested in owning the Japanese yen over the British pound, despite the fact that the British pound itself has been doing okay against a handful of other currencies.
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Risk Appetite
Unfortunately, the whole world is on fire at the moment and as such, it’s very likely that we will continue to see a lot of overreaction around the world. That being said, we are in the midst of a major consolidation area, so I think there is more risk to the upside if we do get more risk appetite flowing back into the market. After all, markets and the overall attitude of people around the world are so skewed to negativity that if we get some type of decent announcement coming out of the White House as far as a trade deal, then it could send this market to the upside.
Keep in mind that the ¥190 level is an area that has been important more than once, with the 50 Day EMA racing toward it to offer resistance. If we fall from here, there is a massive amount of support at the ¥185 level, where we had bounce from before then. All things being equal, this could be a scenario where the market is trying to find some type of range, but quite frankly we need to see a lot of the nonsense in other markets to get things going here. Unfortunately, people panic first before looking at the longer-term trade, and therefore volatility will continue to be something that you see here.
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