The British pound has gone back and forth during the week, as we continue to see a lot of “push and pull” when it comes to the pair, as the British pound is trying to take off to the upside and all it needs at this point is some type of catalyst to make people either feel more comfortable with Brexit, or perhaps a major “risk on” scenario around the world as it will cause the Japanese yen the selloff in general. That being said, the fact that we are forming a major pen it suggests that we are more than likely going to go higher.
GBP/JPY Video 18.11.19
Pullbacks at this point will have to deal with the 50 week moving average, and of course the previous support and resistance at the ¥137.50 level. To the upside, if we were to break out above the top of the pennant, I believe that the market goes looking towards the 100% Fibonacci retracement level which is closer to the ¥148.50 level. All things being equal I do believe in the upside, but I also recognize that the occasional pullback can come into play and perhaps offer a bit of value. It would take a complete collapse of Brexit for me to start shorting this pair at this point or some type of major economic event as the Japanese yen would be bought up in order to find safety. According to the technical analysis though, it certainly looks as if the buyers will eventually have their way in this market.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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