The British pound initially tried to rally against the Japanese yen during the trading session on Thursday again, but also as we have seen for several sessions now, the sellers came back in. However, what I find interesting is that we are at an area that has been staunch support.
The British pound initially tried to rally during the trading session on Thursday but ran into the buzz saw of resistance that made up the shooting star from the Wednesday session. Longer-term, when I look at this chart, it doesn’t take much imagination to visualize a bullish flag. However, I also see a lot of resistance just above so it’s very likely that this market will continue to be very noisy. With that being the case, I think that building a slow and steady core position might be the best way to go. Ultimately, I think that the market will probably break towards the 200 day EMA but we need some type of good news to get going.
That good news could come in the form of Brexit headlines that suggest cooperation, or it could also be global in its aspects, such as an agreement between the Americans and the Chinese. Remember, this pair is a barometer for risk appetite, but unlike many of the times in the past, this has the added specter of Brexit attached to it. One things for sure though, when I start looking at the longer-term charts, I do believe that we are finding value hunters coming back into this pair. If we were to break down below the ¥140 level, that might perhaps change my opinion, but right now it looks as if we are forming an excellent looking bullish flag from a massive bounce.
Please let us know what you think in the comments below
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.