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Christopher Lewis
GBP/JPY daily chart, November 27, 2019

The British pound initially tried to rally against the Japanese yen but gave back the gains as we continue to grind back and forth. This has been a very tight consolidation area, between the ¥139.50 level and the ¥141.50 level. Ultimately, this is a market that should continue to be back and forth, as we await the UK election results and quite frankly some type of movement in the US/China trade situation. Remember, this pair is highly sensitive to risk appetite so it’s likely that we will continue to try and wait for headlines.

GBP/JPY  Video 27.11.19

That being said, this is Thanksgiving week, so the United States probably won’t have much to do with volatility. With that in mind, the market is likely to simply go back and forth, waiting for some type of momentum. If you are a short-term trader, it’s very likely that trading back and forth will be profitable going forward, but eventually the market will make its intentions known, and it will be a violent move. Most likely, a break above the ¥142 level will kick off a massive move higher essentially sending the “bullish flag” situation into high gear and attacking the ¥149 level above. Further adding to the idea of bullish pressure is the fact that the 50 day EMA is getting ready to cross the 200 day EMA in the “golden cross”, something that a lot of longer-term traders will be paying attention to. All things being equal, there’s no real evidence to think that we will be selling anytime soon, beyond trading this range.

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