The British pound continues to find buyers as we have broken out now and it looks like we are going to go much higher given enough time. The ¥139 level will more than likely be a target, perhaps even the ¥140 level. Now that we are breaking out the way we are in the fact that the British pound is above the $1.30 level, it is likely that we will see that translate into a bigger move over here as well. If we can get the stock markets to rally again, that will almost certainly drag this pair higher as well due to the risk appetite function of it. With that being said, buying pullback should continue to work as there seems to be plenty of liquidity out there to drive asset prices higher.
GBP/JPY Video 31.07.20
The 200 day EMA sits at the bottom of the daily candlestick, so that is also a very bullish sign. The British pound simply will not roll over, so there is no need to fight it over here either. In general, I think that we are looking at this pair going much higher over the longer term, as the British pound itself has got a bit parabolic against many other currencies. One of the things that has kept this pair a bit muted is the fact that the dollar is falling hard against the Japanese yen, so therefore there is a little bit of Japanese yen strength overall. Regardless, there is only one direction you can be trading the British pound right now and that is to the upside. That not only includes the GBP/USD pair but also this one.
For a look at all of today’s economic events, check out our economic calendar.