GBP/JPY continues to rally on signs of positivity in China

The British pound rallied against the Japanese yen during the trading session on Tuesday, reaching towards the 152 handle. This was in reaction to the Chinese looking likely to try to defuse the situation between the Chinese and the Americans as far as trade relations are concerned, and I think that should continue to be good for risk appetite overall. The stock markets a course have their influence on the pair also, considering that the market has such a high correlation to risk appetite. I think that the 150-level underneath is the “floor” in the market, and perhaps even the previous uptrend line that we have now broken above could act very much the same. I believe that the 155 level above is a target, which has been resistance in the past.

I expect to see a significant amount of noise, but overall, I think that short-term pullbacks will be buying opportunities, unless of course we get some type of negative headlines coming out of the trade negotiations or worse yet, the headlines. The market will continue to be very jittery, but I think if you build up slowly, you could get a nice sized position for a larger move. The alternate scenario of course is that we break down below the 150 handle, which would be a negative turn of events, sending this market down to the 148.50 level. The markets will be susceptible to headline risk, so be careful as to your position size and make sure that you have stop loss is in place.

GBP/JPY  Video 11.04.18