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Christopher Lewis
GBP/JPY daily chart, February 11, 2019

The British pound initially dipped slightly against the Japanese yen on Friday, but then turned around to show resiliency yet again. We formed a hammer during the day Thursday, so this of course is a very bullish sign in general. The British pound has been resilient against most currencies around the world, and I think at this point we are witnessing the trend changing effect of value hunting. I believe that we are starting to see the British pound bottom longer term, and therefore I would not be surprised at all to see this market takeoff eventually. The keyword here is of course “eventually.”

GBP/JPY  Video 11.02.19

I think the 200 day EMA, pictured in black on the chart is going to offer a significant amount of resistance. I also think the ¥145 level will as well. Looking at this chart, I think that we will probably get a little bit of choppiness in this near term, but I do think that traders will continue to pick up this market on dips. This isn’t going to be easy, because this market is also somewhat risk sensitive, but of course we have that whole Brexit thing going on at the same time. Expect headlines to continue to cause issues, but overall I think that the decision has been made that the British pound has simply gotten far too cheap to ignore. I am cautiously optimistic at this point, but also will be building a position slowly.

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