The British pound initially pulled back a bit during the trading session on Wednesday, showing signs of weakness but we have again found the ¥142.50 level to be supportive as it has been over the last couple of days. In fact, we are knocking on the door break out above the ¥143.50, which would be a very bullish sign. At this point, the market has been very choppy and then should continue to grind higher. At this point, I think that the market will go looking towards the ¥145 level, and then eventually the ¥147.50 level. Underneath, the 50 day EMA has offered quite a bit of support near the ¥141 level.
GBP/JPY Video 16.01.20
What’s even more significant is that a pullback has reached towards the bullish flag that had previously been so important, and therefore there are a lot of orders in the body of the flag that should continue to show plenty of signs of support. Ultimately, this is a market that might be a bit choppy and difficult to deal with but if you are cautious and have a reasonable position size, you can add as we go higher. In other words, you can form a bit of a core position, and then simply get bigger as the market works out in your favor. I have no interest in shorting this pair, it has shown quite a bit of resiliency. That being the case, I think that this will move right along with risk appetite more than anything else.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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