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Christopher Lewis
GBP/JPY daily chart, September 06, 2019

The British pound has rallied a bit during the trading session on Thursday, reaching towards the 50 day EMA and perhaps even more importantly the ¥132.50 level. That is an area that has quite a bit of clustering on shorter-term charts, so I think it’s possible we could get a bit of a pullback from here. After all, most of this is due to parliament taking a “no deal Brexit” off the table, but I’m pretty sure we’ve seen that movie before. Because of this, one has to think that although we could get a vicious rip higher, I suspect it’s only a matter of time before this market sells off again. With that in mind I’m simply looking for signs of exhaustion and willing to take advantage of it as it shows itself.

GBP/JPY  Video 06.09.19

Ultimately, I think it’s going to be more of a waiting game than anything else. The ¥135 level above is massive resistance as well, so I think any signs of exhaustion will be jumped on there as well. Ultimately, this is a market that should continue to struggle to go higher, because even if we do get a “no deal Brexit” finality, the reality is that the British pound still has a lot of issues. Beyond that, this is a risk sensitive pair so one would have to think that risk appetite would have to suddenly turn around for the long term for this market to find an uptrend. At this point in time it’s only a matter time before we sell off.

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