The British pound initially fell against the Japanese yen to kick off the week on Monday but has turned around to show signs of bullish pressure again, as we are hanging around the ¥155 level. Whether or not we can break out for a bigger move might be a different question, but at this point it appears to me that the market is ready to at least make a serious attempt at it. With that being the case, I like the idea of buying short-term dips, but I do not necessarily know that we are ready to take off in the short term. Because of this, I would venture to say that we could very well have a market that simply kills time at this big figure.
GBP/JPY Video 15.06.21
To the downside, I believe that the ¥153.50 level is an area that should be somewhat supportive, but at this point in time I think there is even more support underneath at the ¥152.50 level. Nonetheless, we are in an uptrend so therefore I think that is what you need to be focusing on more than anything else. Keep in mind that this pair is highly sensitive to risk appetite overall, and that of course has a major influence on where we go next. It does appear that people are still willing to take risk, perhaps for no other reason than to avoid the damages of inflation and central bank policy.
That being said, we have been going from the lower left to the upper right, which is probably the most important thing to notice on any chart. If we can break out above the highs from both Thursday and Friday of last week, then I think we will continue to see momentum pick up.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire