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Christopher Lewis
GBP/JPY daily chart, August 28, 2019

The British pound has initially fallen during the trading session on Tuesday but found enough support underneath the turn around and reach towards the ¥130 level again. This is a good turn of events for the British pound but nothing has changed longer-term to suggest that the British pound should suddenly be a currency you look to buy. I believe at this pair will offer a nice selling opportunity after a short-term rally; you can even make an argument for a bit of a rising wedge. If the rising wedge kicks off, we could break down towards the lows again.

GBP/JPY  Video 28.08.19

The ¥126 level underneath is the beginning of significant support, and I think it will take quite a bit of momentum to finally break that level. Once we do though, then I fully anticipate that we go looking towards the ¥120 level. Keep in mind that we are getting relatively close to the Brexit and of course more importantly the deadline, and at this point there is no likely deal coming. Eventually that starts to jump into the market again, and there should be a nice selling opportunity. The ¥132.50 level features a small cluster that coincides quite nicely with the 50 day EMA, giving us an opportunity to start selling based upon the fact that this is also a risk barometer, and of course the global markets out there aren’t exactly instilling confidence these days. All things being equal I think it’s simply a matter of waiting for an opportunity to start selling again.

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