The British pound rallied rather significantly during the trading session on Tuesday, slamming into the ¥139 level, an area that has been crucial for several sessions now, and I believe offers resistance all the way to the ¥140 level. With that, we can finally break above the ¥140 level this is a market that will go much higher. Am currently watching how the candlestick closes because it has the possibility of not having a long wick to the upside, which shows weakness. If we can close towards the top of the candlestick it is a very strong sign that we are ready to break out.
GBP/JPY Video 12.08.20
On a move above the ¥140 level, then it is likely we go looking towards the ¥145 level. That would of course be a large, round, psychologically significant target, an area where a lot of people would be paying attention to. Ultimately, this is a market that I think does that exact move but as you know this pair tends to be rather volatile. The British pound has been strong for quite some time, and I think that continues to be the case. With that scenario, buying dips also works, as the ¥138 level has been massive support as well. If we break down below there, then the ¥136 level would be another nice buying opportunity as the 200 day EMA sits right in that same area. Ultimately, I have no interest in shorting this pair anytime soon as it looks so strong.
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This article was originally posted on FX Empire
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