The British pound has gone back and forth during the course of the week, reaching towards the 200 week EMA, which has been important more than once, thereby it is not a huge surprise to see that we pulled back from there. At this point, the market continues to see the ¥140 level underneath as massive support, and therefore I think that if we pull back towards that area, we will see people continue to push this market to the upside. On the other hand, if we were to break above the top of the candlestick for this previous week, then the market could go towards the ¥145 level.
GBP/JPY Video 18.01.20
The market is trying to get back towards a more historic norm price, and therefore I think that we do eventually see this market going to the upside. The ¥150 level is probably the longer-term target, but that might be something that we are looking at towards the end of the year, assuming that we continue to see a reflation trade and of course that the United Kingdom turn things back around after the Brexit fiasco and of course the lockdowns. At this point, I think we will probably see a lot of noise in general, so keep in mind that your position size needs to be small enough to make it a reasonable trade to be involved in, but at this point I think you do get an opportunity to pick up value underneath and should look at pullbacks as a bit of a gap. I do not have any interest in trying to short this market, at least not until we were to break down below the ¥137 level.
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