The British pound broke down during the week, slicing towards the ¥145 level, an area that is of course crucial due to the fact that it is a large, round, psychologically significant figure, and of course a place that we’ve seen the lot of action at more than once. Ultimately, I’m looking for an opportunity to start buying the British pound, based upon the fact that we have recently taken off to the upside from a mass of bullish flag. That flag measures for a move to roughly ¥155, and I think all it would take is a bit of good news coming from the Brexit situation to make that happen pronto.
GBP/JPY Video 11.03.19
On the downside, I think that the one ¥42.50 level is essentially the “floor” in the market, due to the fact that the flag is based there. I have no interest in shorting anytime soon, and I will look at pullbacks as a nice buying opportunities for small positions. I also recognize that the ¥150 level above is going to be a significant amount of resistance based upon not only structural moves over the last several months, but the fact that it is a large, round, psychologically significant figure. It may take several attempts to finally break above there, so ultimately this may be a situation where you need to pick up little bits and pieces of British pounds. Overall, it’s going to take a certain amount of confidence, and of course patients.
Please let us know what you think in the comments below