The British pound initially pulled back a bit during the week, but then turned around to reach towards the 200 week EMA. At this point, the ¥140 level underneath is likely to be massive support, and therefore I think that the market will continue to look at that as a potential “floor” in trading. I think that we will eventually break out to the upside, but liquidity will be an issue between now and January 6. Most traders won’t be overly involved until then, so I much more comfortable buying this market on dips in the meantime in order to perhaps take advantage of value. The market breaking below the ¥140 level would be a major turn of events but right now I think we are going to consolidate between the ¥140 level on the bottom and the ¥148 level on the top. I am more bullish than bearish, especially if the US/China trade situation does fairly well.
GBP/JPY Video 30.12.19
Keep in mind that this pair is highly sensitive to risk appetite, but most importantly right now they are paying attention to Brexit more than anything else over here, so as long as that goes well, this pair will skyrocket as it is historically cheap down here. Pullbacks below the ¥140 level would be rather negative and could break this market down significantly. I don’t expect to see that anytime soon though, and remain positive in general, building up bits and pieces for a core position.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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