The British pound initially dipped against the Japanese yen on Tuesday, but then shot through the 145 handle handily. Because of this, it looks as if the market is going to continue to see bullish pressure in this market as the breakout was so significant. Given enough time, it’s likely that the markets will reach towards much higher levels, but given enough time I think that the markets will reach towards the 146 handle, and then a break above there towards the 147.50 level. The markets should continue to see volatility, but nonetheless it appears that the market has made a significant move, and I believe that there should be follow-through.
Buying dips
Ultimately, I believe that buying dips will continue to be the way to go in this market, as it appears that the pair has made up its mind to go much higher. Breaking above the 145 handle is important, and it could very well lead to the aforementioned 147.50 level. That’s not to say that we won’t pull back from time to time, but I look at those as buying opportunities in a market that is very bullish. If we can break above the 147.50 level, the market should then go to the 150 handle. Nonetheless, this is a market that I think will be very choppy, so a smaller position size may not be a bad idea. If we break down below the 144 handle, that would change everything though, and have the sellers taking control yet again.
GBP/JPY Video 26.7.17
This article was originally posted on FX Empire