The British pound rallied significantly during the trading session on Thursday, reaching towards ¥146 level. This is the area of resistance as we have seen come into play previously, and we are already starting to see the market pulled back just a bit. When looking at the chart, you can see that there is the possibility of a double top at the 146 handle, but when you look at the longer-term chart we are still very much in a downtrend based upon a massive channel. Because of this, I think that this rally will probably roll over again, but I also recognize that there are a lot of buyers out there willing to pick up the British pound based upon a potentially good headline coming out of the Brexit. That of course will have a major influence on this market, but I think that short-term rally will be stuffed because of the market participants are focusing on other things than the stock market.
I look at the ¥145 level as an area of potential support, but I also recognize that the 146 level is significantly resistive. If we were to break above that level then we could go a little bit higher. Expect a lot of volatility, because headlines out there could turn this market around in an instant. The US/China situation could flareup and send this market lower, just as errant comment from an EU official could send the British pound lower overall.