The Sterling Yen cross, or GBP/JPY has been a bit difficult to trade for most people in recent weeks. Clearly the easy-money days are gone. Yet, one can hardly recommend a buy here. The sentiment is overwhelmingly negative and we don’t know how much exposure UK banks have to the smaller Spanish Banks. Using Elliott Wave Analysis to study Sterling/Yen, my best guess now is we are tracing out an expanding diagonal triangle pattern. If we stabilize at 116.35/50 levels, then maybe one can profess the possibility of a recovery to 135.00. But later on we could come off once again. On the whole, anyone who is wanting to buy Sterling versus Yen is well advised to sit tight until the storm passes.
