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Christopher Lewis
GBP/JPY daily chart, March 12, 2019

The British pound initially gapped lower against the Japanese yen during the trading session on Monday to kick off the week, but then turned around to show signs of strength yet again. By doing so, it looks likely to continue going higher, as we have seen so much in the way of bullish pressure over the last several weeks. We had formed a very strong bullish flag as I have marked on the chart, we have exploded to the upside, and then pulled back to reach towards the top of that bullish flag to find support yet again.

GBP/JPY  Video 12.03.19

Based upon the bullish flag, we should go looking towards the ¥155 level given enough time, but obviously that’s going to take significant patience and of lot of momentum building. Because of the bullish flag, it’s not until we break down below the ¥143 level that I would consider shorting this pair, and even then I would be a bit hesitant.

Obviously, there are going to be a lot of headline risks going forward as we have the Brexit going on, and of course major votes coming this week. However, unless there is a “no deal Brexit”, it’s very unlikely that the British pound falls for a significant amount of time. Beyond that, the Japanese yen has been selling off so pay attention to that as well, as it obviously has a big effect on the pair. I do believe that if we can finally break above the ¥150 level, the momentum to the upside will be much stronger.

Please let us know what you think in the comments below

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