The British pound rallied a bit during the trading session on Friday, breaking above the ¥140 level. However, the market is currently consolidating, so at this point it looks likely that the market participants will continue to go back and forth as we hover around this level. This is a large, round, psychologically significant figure, and therefore it makes quite a bit of sense that we would go back and forth.
GBP/JPY Video 18.11.19
The 200 day EMA underneath is going to cause a certain amount of support obviously, and you could make an argument that we are starting to form a bullish pennant. If we were to break above the ¥141.50 level, it’s likely that the market could then go to the ¥145 level. To the downside, if we were to break down below the 200 day EMA I would not be a seller, rather I would be looking for some type of support underneath to start buying. The ¥137.50 level is an area that I’d be interested in, followed by the ¥135 level. Beyond that, the 50 day EMA looks as if it wants to break above the 200 day EMA. If it does, that is essentially a “golden cross.”
I do believe that eventually we go much higher, and based upon the pole of the bullish pennant, the market looks as if it could go as high as ¥149, which is the 100% Fibonacci retracement level. All things being equal, I do think that we break out but we need some type of catalyst to make that move.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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