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

Theresa May has announced her resignation, although we need to suffer through a few more weeks of her leadership. At this point, it looks as if rallies will continue to be sold, because quite frankly this is a market that is so sensitive to the whims of global trade not to mention the Brexit mass. With this being the case, we have broken through the ¥140 level recently, and now we have turned around to reach underneath that level before falling yet again.

GBP/JPY  Video 27.05.19

At this point, if we continue to see a lot of negativity, which I do believe will be the case, we will probably go down to the ¥138 level underneath which also coincides nicely with the 61.8% Fibonacci retracement level. I continue to fade short-term rallies that show signs of exhaustion, as the British pound is clearly on its back feet. Otherwise, if we can break above the ¥140 level, we could make a move towards the ¥141.50 level.

We are oversold, but quite frankly it’s not until we see a complete change of attitude that the oversold market can give the obligatory bounce. However, if we break down below the 61.8% Fibonacci retracement level, the market is very likely to go down to the ¥132 level next. At this point in time though, it’s very difficult to be a buyer of this pair unless of course we had some type of Brexit agreement that suddenly solves everything. Since that’s not going to happen, continue to look for short-term selling opportunities.

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