British Pound Continues to Press Higher Against Yen During the Week

The British pound has shown itself to be rather resilient during the course of the week, as we reached towards the ¥155 level only to turn around and rally again. At this point, it looks as if traders are focusing more on the interest rate differential than anything else, because quite frankly this is a pair that is highly sensitive to risk appetite as well. If we were to focus on a lot of the fear in the market, that is actually pretty toxic for this pair. At that point, I suspect we go looking towards the ¥155 level underneath, possibly even the ¥152.50 level which of course is an area where we have bounced from previously.

GBP/JPY Video 14.02.22

If we take off to the upside, then this pair becomes more of a “buy-and-hold” type of situation, which from a technical analysis standpoint looks more likely than not. That being said, I do think that we have a situation where the markets are trying to break above the crucial highs, and perhaps go looking towards the ¥160 level. However, we are sitting in an area that has been resistance multiple times in the past, so therefore you have to understand that there is a real possibility that it is going to be very difficult to get above.

Because of this, I think you need to be a bit hesitant to go “all in”, unless of course we get that breakout that could be so valuable. In the short term, look at pullbacks as potential buying opportunities to build up a position.

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