- The British pound faces consolidation against the Japanese yen near ¥202 after volatile sessions.
- Support lies around ¥200 and resistance at ¥204–¥205, with the broader trend remaining bullish and positive carry favoring long positions.
The British pound initially rallied during the trading session on Monday against the Japanese yen. As we continue to see a lot of noisy trading over the last four sessions, we have seen a hammer, an inverted hammer, a hammer, and then another inverted hammer. With that being said, it looks very much like a market that is stuck at the ¥202 level. Even if we break down from here, I think there's a lot of support near the ¥200 level, which also has the 50-day EMA coming into the picture.
The Importance of the 50-day EMA
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The 50-day EMA is a famous trend-following type of indicator that I think will attract a lot of attention. And the fact that it's right there at that ¥200 level, of course, has even more people paying attention to it. If we can break above the ¥204 level, then it opens up the possibility of the ¥205 level rather quickly.
Overall, we are in a positive trend, with the British pound offering a positive swap against the Japanese yen. And when you look around the forex world at the moment, all of the yen-related pairs look the same. They all gapped higher, pulled back a bit, and now they look as if they are trying to at least grind to the upside.
That being said, this is a very noisy couple of sessions, so I don't think we're in the all clear to get overly bullish yet. But you get the payment at the end of every day via swap to at least make this pair work out over the longer term, assuming that the trend continues. I see nothing on this chart that changes that trend anytime soon.
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