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Christopher Lewis
GBP/JPY daily chart, October 29, 2019

The British pound has rallied a bit during the trading session on Monday against the Japanese yen. This is a very risk sensitive currency pair, and it’s likely that it will move back and forth based upon the attitude of the overall market in general. That being said, it certainly looks as if the market is trying to form a bit of a bullish flag or perhaps even breakout to the upside. A fresh, new highs should continue to go towards the ¥143 level, followed by the ¥145 level.

GBP/JPY  Video 29.10.19

Just underneath current levels, the 200-day EMA should offer support. Because of this, I believe that the market will continue to find buyers, but we also have to worry about headline noise involving Brexit and a whole host of other issues that could influence where this pair goes. It is a little bit overextended, so this sideways action might be exactly what the market needs to digest the gains. The market is forming a bit of a bullish flag, so that could send this market much, much higher. The 61.8% Fibonacci retracement level is around this area, and if we were to break out of the upside it could send this market looking as high as the 100% Fibonacci retracement level. That obviously is a longer-term call, but it’s typical technical analysis. This would send this market as high as ¥149 over the longer term. Pullbacks at this point, even if they break down below the 200-day EMA, opens up the idea of the 50-day EMA which is closer to the ¥135 level.

Please let us know what you think in the comments below

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