The British pound rallied against the Japanese yen during the week, as we reached towards the 148.50 level. A break above that level should send this market much higher as it would be a breaking of the ascending triangle, and should send this to much higher levels. I believe that the 145-level underneath should continue to be massively supportive, just as the uptrend line would. This pair is highly sensitive to risk appetite, and I believe that the market will continue to favor the upside if stock markets can rally, and of course commodity markets can as well. There will be a lot of noise coming out of the negotiations between London and Brussels, as this would have a massive amount of influence on the British pound itself.
Longer-term, I believe we go higher
Longer-term, I believe that this market will go higher, as the downtrend may be over and the British pound longer term. On top of that, the market continues to see the Japanese yen being sold off against other currencies, so I don’t think that it’s going to be any different here. There is a little bit of a difference in this pair though, because the market tends to pay attention to headlines coming out of the negotiations over economic announcements. This being the case, I think that it’s only a matter of time before we get some volatility, but those pullbacks should give us an opportunity to go long. I have no interest in shorting into we break down below the uptrend line, which is far below, so that being the case it’s likely that the buyers will continue to run the show when it comes to this pair.
GBP/JPY Video 10.7.17
This article was originally posted on FX Empire