The British pound rallied a bit during the trading session on Thursday, reaching towards the ¥145.50 level, and then rolled over as it was announced that tariffs are coming out of the United States, reaching towards the Canadians, Mexicans, and the Europeans. I believe that has a lot of people concerned about potential retaliation, and that of course can give a bit of pause when it comes to people looking to invest. That has people buying the Japanese yen, as a closeout risk appetite based positions. I think that the ¥144 level underneath is going to offer support, but if we can break down below that level it’s likely that we could go lower, perhaps reaching towards the ¥143.50 level. Otherwise, we could bounce back towards the highs of the day, but that would be a simple consolidated move continuing itself.
Longer-term, this is a market that has been struggling, and I think that it’s only a matter of time before the downtrend continues itself. The previous uptrend line has been broken and it does suggest that we have a lot of negativity in this market. I believe that there are far too many geopolitical concerns out there to lift this market for the longer-term, so I look at rallies as potential value plays for sellers looking to get the Japanese yen “on the cheap.” Overall, I’m a net seller in this pair.