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Christopher Lewis
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The British pound has rallied significantly during the course of the week, showing strength yet again. The breaking of the ¥153 level is a very strong sign, showing that we could perhaps go looking towards the ¥155 level. The market gapped higher to kick off the week, and then just shot straight up in the air to break through what had been resistance. By doing so, it suggests that we are going to go looking towards the ¥155 level.

GBP/JPY Video 17.05.21

Underneath, the ¥150 level is a bit of a “floor the market”, and I do think will be massive support. Furthermore, the 50 week EMA has just crossed above the 200 week EMA, suggesting that we are going to see a much longer term move. I think that is very likely, and you can take a look at the weekly chart and see that we have in fact just broken out of something akin to a bullish flag. This could lead to a multi handle move over the longer term, so I think investors are starting to stand up and take notice yet again. Obviously, they knew that the market had been bullish previously, and now it looks like we are trying to continue that overall momentum.

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If we do pull back, I believe that it is only a matter of time before we would see support underneath, most specifically the ¥150 level. However, that gap from the open on Monday could also be massive support, and therefore I would not be surprised at all to see that hold up. Regardless, I have no interest in shorting this market anytime soon.

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

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