British pound has a rocky session on Wednesday
The British pound initially rallied against the Japanese yen during trading on Wednesday but found the 149 level to be a bit too resistive to continue to go higher. On the hourly chart, we have formed a couple of shooting stars, which is a negative sign. I think at this point it’s likely that we will roll over again, for at least a short-term move. I think there is significant support at the 148.25 level, at least on short-term charts. If we break down below there, the market is likely to test the 148-level next. Otherwise, we can break above the 149.25 handle, then I think the market probably goes looking for the psychologically and structurally important ¥150 level.
I believe that volatility will continue to be a major issue in this pair, and that if you are nimble enough, you could trade this pair somewhat back-and-forth, but we do have a couple of levels that are worth paying attention to and could direct where we go over the next several days. I think it will be very volatile, so keep your position size small as it could cause quick losses if you are not careful enough. I believe that the market is going to need to pullback a couple of times to build up the necessary momentum to go higher, assuming we even can. Pay attention to risk appetite, it will have a lot to do with where we go next.