The British pound finds support against Japanese yen
The British pound has bounced from the 147 level below, breaking above the 148 level. By doing so, the market looks likely to attempt a breakout above the small cluster just above, but if we do get above there, I think there are plenty of areas above that could be sold, with the 150 level being massive resistance, and it’s not until then that I would consider this market as one that can be bought with any type of confidence. I believe that the market will eventually break down a bit more, before reaching down to the 146 level. I think longer-term, we could be looking towards the 145 handle as well, as it is a large, round, psychologically significant number and of course has offered reactions in the past.
If we did break above the 150 handle, then that of course would show a major shift in attitude, and it also gives us a couple hundred pips worth of positivity between now and then. That of course would be something to pay attention to as well, and therefore would be something that I can believe in. Until then, I think we are probably going to see sellers jump in on short-term rallies, and at the first sign of exhaustion. That has been the way going forward for several days, so I think we should continue underneath. The 145-level underneath is my longer-term target, but I also recognize is can you take a lot of work to get there.