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Christopher Lewis
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The British pound has pulled back towards the ¥150 level during the trading session on Monday but found buyers near the ¥150 level again to get things going. At this point, the market is likely to continue to see buyers jumping in to push this market higher. After all, this is more of a “risk on” type of situation, especially considering that earnings season is starting in America this week, and that tends to push a lot of people into risk assets. If that is going to be the case, that will also help this pair, driving money away from the Japanese yen.

GBP/JPY Video 13.04.21

Underneath, we have the 50 day EMA that offers support as well, and obviously we are in an uptrend longer term. Looking at this market, we have been chopping around in this area, but I do think that it is probably only a matter of time before we try to reach the highs again, especially as the ¥150 level offers so much in the way of psychological support. At this point, I would not be surprised at all to see this market trying to make another high, but obviously we need a lot of “risk on behavior” around the world to drive this pair higher. Nonetheless, this is a market that clearly cannot be shorted anytime soon so I do like the idea of going long at this point.

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If we were to break down below the 50 day EMA, then I think we will probably “reset” somewhere near the ¥145 level where we had seen a major breakout previously as well. Going forward, the British pound is highly undervalued, and therefore I think longer-term traders looking to hold on.

For a look at all of today’s economic events, check out our economic calendar.

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