The British pound initially tried to rally against the Japanese yen in early Asian trading on Monday but has given back a bit of the gains. By doing so it looks as if we are going to marinate around the ¥145 level, trying to come up with some type of catalyst or momentum to get moving. I do recognize that the ¥145 level is a large come around, psychologically significant figure and of course will attract a certain amount of attention. I also recognize that the 200 day exponential moving average is just below, and that we have a support area that extends down to the ¥144 level. With all of that in mind, I’m not necessarily looking to sell this market until we get below the ¥144 level. In fact, I’m looking for signs of support or life that I can start buying.
GBP/JPY Video 23.04.19
Keep in mind that this pair is highly sensitive to risk appetite so it’ll be interesting to see how that plays out as we get through the week. Beyond that, we have the normal noise and drama around the Brexit, so also recognize that a potential for headline reaction is still there. Ultimately, I do think that this market will find buyers, based upon the bullish flag underneath that we need some type of catalyst to go higher. Once we do, the ¥147 level will be the initial target, followed by the ¥148.50 level and then the ¥150 level. For what it’s worth, that bullish flag measures for a move all the way to the ¥155 level but obviously we would need some type of resolution to the Brexit for the British pound to get that strong.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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