The British pound forms ominous candle for the weekThe British pound initially tried to rally during the week to test the ¥150 level. We rolled over at that point form a bit of a shooting star, and the shooting star of course is a negative sign. We are sitting just on top of the uptrend line that is offering major support. If we were to break down below the bottom of the uptrend line, we could drift quite a bit lower.
The British pound initially tried to rally during the week but turned around to form a shooting star that sitting on top of a major uptrend line. If we are to break down below the uptrend line I think that the market could probably go down to the ¥145 level, and then perhaps the ¥142.50 level. The alternate scenario of course is that we break above the ¥150 level, which would be a very bullish sign, but one of the things that I would point out is that the most recent high was lower, and the exhaustive candle for the week suggests to me that we are going to continue to show a bit of weakness. I believe that taking a trade a break above the ¥150 level, or perhaps a breakdown below the bottom of the range for the week is the way to go, and in the meantime it’s likely that we are going to see nothing short of noise than anything else.
If we do break above the ¥150 level, then I think the ¥155 level would be targeted, but it’s likely that it will be a difficult trade to take. One thing that helps though is that the GBP/USD pair is showing signs of support at a major uptrend line, so that could give us a bit of bullish pressure here. Pay attention to both markets to lead the way.