The British pound rallied significantly during the trading session on Friday, breaking above the ¥146 level. By doing so, we have cleared a significant barrier, and it looks as if we continue to see the British pound rally significantly after the impulsive move from a few days ago. However, there is a lot of noise in this market, and that suggests that we will have several pullbacks, even if we do go much higher.
However, if we were to turn around and break below the ¥145.50 level, that would be negative enough to send this market lower. It is worth noting that the British pound has fallen against the US dollar, so there is a certain amount of caution that should be used when trading this pair. After all, if the British pound is struggling against the benchmark, people will have to question whether it can hold gains against the Japanese yen. The market will be very volatile regardless what happens, and it’s likely that we will need to be very cautious going forward. I think there are a lot of concerns when it comes to geopolitical issues, not the least of which would have been the recent trade spats between various countries and the United States. If tariffs continue to be levied, that could put a lot of bearish pressure in this market suddenly. Because of this, a smaller than usual position has been what I’ve been talking about lately, but I realize that as the trade works out in your favor you can build up a larger position. I think that the ¥148 level above will be the target if the buyers continue to have the upper hand.
GBP/JPY Video 25.06.18
This article was originally posted on FX Empire
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