Christopher Lewis
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The British pound initially pulled back during the trading session on Tuesday only to turn around and show signs of treading water. The last couple of days have seen the market hang around the ¥149 level, and therefore it is not a huge surprise that we find ourselves there again. The ¥150 level above is significant resistance and of course a large, round, psychologically significant figure, so taking a bit of time to get through that level would not be a huge surprise. Quite frankly, I would like to see some type of pullback to take advantage of “cheap pounds” in this market.

GBP/JPY Video 3.03.21

I think that this market could go all the way down to the ¥145 level minimum, where I would anticipate seeing a lot of support. The 50 day EMA is going to continue to see a lot of attention paid to it, and the fact that it is getting close to the ¥145 level, everything kind of lines up quite nicely in that general vicinity to make for a potential longer-term trade. However, if we grind sideways in the meantime and then breakout, that is also a very strong sign. Either way, I do not have any interest in shorting this market, I believe that we will continue to see buyers jumping into this market, but in the short term I think what we have is a “long only” type of marketplace currently. As we continue to see the United Kingdom recover, I anticipate that more money will flow into this pair.

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