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Christopher Lewis
GBP/JPY

The British pound has rallied during the trading session, shooting straight up in the air as people get usual reaction due to the idea of an extension of a temporary deal in order to avoid a hard Brexit. However, at this point in time nothing is known for sure, and the market is moving on rumors yet again. With that being the case, I do believe that we could make a move towards the ¥140 level, but at that point it is very unlikely that the market will be able to shoot through there without some type of major resistance.

GBP/JPY Video 24.11.20

Because of this, short-term traders will probably continue to buy dips, especially with the ¥138 level looking so supportive but at the end of the day I do not think we can break through the ¥140 level without further confirmation of good news. Until we get that, it is very unlikely that we would see a breakout. Even if we did, the lid would be somewhere near the ¥142 level. After all, even some type of extension that shows that perhaps people are willing to talk further still does not solve the main issues. The knee-jerk reaction will probably be sold into later in the week, so keep in mind that the upside may still be somewhat limited until we get a finalize deal.

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This is not to say that I would be selling, just that I will be keeping my expectations realistic. I suspect at this point we will only get more volatility, which of course is par for the course as of late.

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

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