The GBP/JPY pair gapped lower at the open on Monday, but found enough support of the 24-hour exponential moving average to turn things around and break to the upside. We not only filled the gap, but we broke above it as well. The market is testing the 147 handles, and I believe it’s only a matter of time before we break out to the upside, perhaps reaching towards the 150 level longer term. I have no interest in shorting this market, I believe that pullbacks will continue to offer buying opportunities on signs of support, especially near the 24 and 72-hour exponential moving averages. I think that selling is all but impossible, and that the 145 level will offer a bit of a “floor” in the market over the short-term, as breaking above the level was significant.
British noise
Obviously, there’s going to be a lot of noise when it comes to Britain, due to the divorce from the European Union. The market will continue to move on headlines coming out of the negotiations, and that could cause a bit of a whiplash effect over here. However, if stock markets and risk appetites around the world are reasonably strong, this pair should continue to go to the upside. I think the 150 level is going to be massively resistive, as it is a large, round, psychologically important level. Dips continue to be buying opportunities, and the 145-level holding as support is what is needed to offer confidence for this move. If we broke down below the 145 handle, the market would be very negative, and should send the market right back around. However, it looks likely that we won’t even see that move anytime soon, as the buyers have been so aggressive and surefooted.
GBP/JPY Video 04.7.17
This article was originally posted on FX Empire