Created on March 10, 2025

• During the trading session on Friday, we have seen the British pound dropped to the ¥190 level, only to turn around and show signs of life again.
• By doing so, the market looks as if it is trying to do everything it can to create some type of momentum from a major figure.
• After all, we have seen this market move back and forth quite wildly, as the Japanese yen has been strengthening against a multitude of currencies, but most notably the US dollar.

The question at this point in time is going to be whether or not the risk appetite remains strong enough to send this market higher, or if we are going to continue to see a lot of choppy back and forth behavior. After all, it would make a certain amount of sense considering that the Japanese yen has been strong and the British pound has been as well. In other words, you have to very strong currencies at the moment.

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Interest Rate Differential

That being said, there is a significant interest rate differential between the two currencies, and this should be forgotten. Because of this, I think this pair will have a natural proclivity to attempt a rally, but right now we just don’t have enough momentum to make that happen. The 50 Day EMA is sitting just below the ¥192 level, an area that of course is a very important level that we have seen tested multiple times and of course is also backed up by the 200 Day EMA, which I think is something worth noting.

On the other hand, if we get a daily close significantly below the ¥190 level, then the interest rate differential will obviously be ignored by a lot of traders as the Japanese yen could strengthen, sending this pair down to the crucial ¥188 support level.

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