The British pound has rallied during the trading session on Thursday after initially pulling back. The market has seen a lot of volatility as of late, but as the market continues to find support near the 142 young level this should not be a huge surprise. Furthermore, the British pound has been very strong in general, even rallying against the US dollar, which had been very strong again some other currencies.
GBP/JPY Video 14.02.20
Looking at the chart, breaking above the highs from last week could send this market looking towards the ¥145 level, and you should keep in mind that the market is highly sensitive to risk appetite, but during the trading session we have seen the British pound rally mainly due to the prime minister shifting around the cabinet in what is probably seen as something that was going to be more stable going forward. Ultimately, that’s probably only an excuse, as the market was already setting up for a bit of a bounce anyway.
To the downside I think the ¥140 level will be thought of as a “floor” but quite frankly I’d be a bit surprised to see us reach towards that area unless of course there was some type of major shock to the British pound or perhaps global risk in general. It seems as if the coronavirus situation is starting to slow down, or at least get somewhat contained so I anticipate the path of least resistance will be higher but don’t be surprised if there is a bit of a pullback in the short term to build up the momentum.
Please let us know what you think in the comments below