The British pound has rallied a bit during the trading session on Friday against almost everything as the Bank of England decided not to do anything to work against the value of the currency yet. However, we are testing major resistance against the Japanese yen, and I think that is coming into play at the ¥139 level. We have attempted multiple times to break above this 100 point range, so I think if we can clear the ¥140 level, that would be an extraordinarily bullish sign. Until then, buying on short-term dips may continue to pay dividends, but I would not be looking for big moves until we clear ¥140.
GBP/JPY Video 07.08.20
To the downside, I see the ¥138 level as offering support, just as the ¥137 level will be. Remember that this pair is sensitive to risk appetite in general as well, so pay attention to the stock markets as they can sometimes give you a bit of a “heads up” as to where this pair will go. It does not have to of course, but it is just another tool that you can use. The 50 day EMA is getting ready to cross above the 200 day EMA which of course is a bullish sign from the longer-term standpoint and will catch a lot of attention. I believe that by the end of the day Friday we should have a bit more clarity as to whether or not we could start buying and holding. A break above the ¥140 level does open up the opportunity for this pair to go looking towards the ¥145 level.
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This article was originally posted on FX Empire
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