The British pound has initially tried to rally during the trading session on Friday but gave back the gains as we crashed back into the ¥140.50 area.
The British pound has initially tried to rally during the trading session on Friday but gave back the gains a turnaround or fall pretty hard. Having said that, I would not read too much into this candlestick other than the fact that the market is trying to get back towards the ¥140 level, an area that should continue to offer a significant amount of support, due to the fact that it was so much resistance previously. At this point in time, short-term pullback should be buying opportunities and I do think that it continues to go to the upside, perhaps reaching towards the ¥142.50 level, and then perhaps even the ¥145 level which is my longer-term target.
That being said, it does not mean that it will not be volatile, because obviously it will be. However, if you can wait for some type of short-term bullish move, then we can take advantage of what is a longer-term trend. As far as selling is concerned, I think we need to crash through the ¥138 level before the uptrend is seriously threatened. I think at this point you should also keep in mind that the market continues to see a lot of volatility, but there is still a lot of interest in owning the market. This pair is obviously sensitive to risk appetite, so that could come into play but if we can stabilize a bit after the negativity that we had seen on Thursday, it is likely that this pair will continue the uptrend and make a serious run towards ¥145 over the next several weeks, if not months.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.