The British pound has gone back and forth during the course of the trading session on Monday as we continue to hang about the ¥154 level. This is a local high, and it is worth paying attention to because we are simply consolidating in this area after a nice move to the upside and looking to build up enough momentum to perhaps take out the psychologically significant ¥155 level.
GBP/JPY Video 18.05.21
Looking at this chart, dips should be buying opportunities as we are clearly in an uptrend, and if the British pound can break above the 1.42 level against the US dollar, that will only turbocharge this move as it would add more strength to Sterling to begin with. As far as selling is concerned, I have no interest in doing anything like that, because we are clearly in an uptrend and therefore, I think it is only a matter of time before value hunters come back into the picture. It is also worth noting that the ¥152 level is an area where we gapped at the beginning of last week, so therefore it should continue to offer plenty of support.
What I like the most about this currency pair is that even when we are more “risk off”, this pair simply sit still instead of selling off like it normally would. That tells me that people are looking to go long risk assets, including Sterling versus the Japanese yen. The fact that we are holding so firmly tells me that there is a lot of belief to the upside and therefore I think it is only a matter of time before we go much higher. Once we do, this pair could go to ¥160.
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This article was originally posted on FX Empire