The British pound has struggled a bit during the trading session, especially after the hotter than anticipated jobs number came out. However, there is a certain amount of bullish pressure underneath so I think it’s not until we clear the 1.2975 level that we can start selling again. Interest rates in the United States are going higher but everybody already knows this. The question now is whether or not the Brexit is going to be a good or a bad thing. I anticipate that the pair will probably roll over again, perhaps going into the weekend because of fear of a headline. If we do break higher, then the 1.31 level will be the next resistance barrier to overcome.
GBP/JPY Midday Video 02.11.18
Until we get a Brexit deal, I think that a lot of these rallies will probably be faded, but the 1.27 level was crucial to hold and that’s exactly what we got. My suspicion is that we will probably come back to retest that area to see if it truly does hold. All it would take is some type of negative headline to throw this market back down. If we do rally, I would be a bit cautious about my position size, because quite frankly Twitter has been an absolute nightmare when it comes to trading this market. Algo traders continue to throw the market around in fits as well, reading the latest headlines. Be cautious, but I suspect we probably need to go a little lower first.