The British pound went sideways initially during the day, dipping a little bit, and then rallied on Thursday. We broke above the 146.25 handle, but then turned around and fell again to test for support near the 146 handle. As I write this, the market looks as if it is ready to continue chopping, and given enough time I think we go higher. However, there is plenty of volatility in this pair does tend to be very sensitive to noise in the marketplace. There is certainly a lot of that going around right now, so do not be surprised at all if we continue to struggle to make significant moves. I think that there is certainly a large amount of bullish pressure in the market, but there’s also a lot of fear. Fear tends to work against the value of this currency pair over the longer term.
Buying dips
I continue to buy dips in this market, not necessarily because I like the British pound so much, but it’s more about the Japanese yen for me. I believe that if the stock markets can continue to rally, that should continue to help this market, as we see more of a “risk on” attitude. I believe that stock markets will continue to drive the overall market, so we’ll have to see how that works out. Ultimately, I think that the market will eventually find its footing and continue to go much higher, but you will probably have to deal with a massive amount of volatility in the short term. Longer-term, I believe that the market find buyers and reaches towards the 150 level, but that obviously is going to take a significant amount of time to happen. Ultimately, you should not be trading this market if you cannot deal with significant amounts of volatility.
GBP/JPY Video 28.7.17
This article was originally posted on FX Empire