The British pound rallied a bit during the trading session on Wednesday, breaking above resistance at the ¥143.50 level. Ultimately, the market looks as if it does want to go another 100 pips in the short term, and then perhaps above the ¥145 level to go looking towards the ¥148 level longer-term. This is a pair that is highly sensitive to the risk appetite around the world, and as a result it makes quite a bit of sense that the market has rallied over the last couple of days. That being said, it isn’t going to be a shot straight up in the air, so pay attention to the ability to pick up little bits and pieces on short-term pullbacks.
GBP/JPY Video 20.02.20
It looks as if the 50 day EMA has offered support over the last 48 hours, so that is worth paying attention to as well. The to the downside, the ¥140 level should be a floor in the market, so therefore I think it’s only a matter of time before we reach towards the highs again. At this point, the market looks very likely to continue trying to build a bit of a base to rally from here. This is a market that takes quite a bit of time to get to where it wants to go, but once it makes its decision, the market tends to break rather hard in whatever direction it’s going. At this point, it certainly looks as if the most likely direction is to the upside, but that doesn’t mean that it will happen right away. A certain amount of patience will be needed.