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Christopher Lewis
GBP/JPY daily chart, May 24, 2019

The British pound broke lower during the trading session on Thursday as we continue to see a lot of drama involving whether or not Theresa May will stay or go, and of course the EU parliamentary elections going on in the United Kingdom makes this a bit of a sideshow as well. With this breakdown, it looks very likely that we are going to go to the next major support level, which I have defined as the ¥138 level at the 61.8% Fibonacci retracement level. Ultimately, if we do that it’s likely that the market will completely unwind at that point and probably collapse.

GBP/JPY  Video 24.05.19

On that breakdown, it would not surprise me at all to see this market go to the ¥135 level, possibly even lower. However, if the ¥138 level holds then we could get a bounce back towards the ¥140 level. We need some type of good news out of Great Britain for that to happen though, and quite frankly it’s difficult to imagine that being the case right now considering how much drama and flat out noise continues to be a major issue at this point. In the short term, it certainly looks as if we go lower so obviously selling is about the only thing you can do over the next day or so. That being said, it’s only going to take an announcement or a tweet or something else to turn this right back around.

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