The British pound initially pulled back slightly during the trading session on Wednesday, but then found buyers as more of a “risk on” type of attitude occurred in the markets. Because of this, it looks as if the pair is going to try to go looking towards the ¥135 level. If we can break above the ¥135 level, then it allows for the market to continue going higher. It certainly looks as if the market is resilient and stubborn, and therefore I think it’s only a matter of time before we break out. Certainly, if the stock markets around the world continue to try to rally, that could be reason enough for this market to go to the upside.
GBP/JPY Video 09.04.20
Obviously, the exact opposite can be true and perhaps the market could pull back a bit. If it does, the ¥135 level will offer significant resistance yet again, and the market could fall as low as ¥133. Having said all of that, it looks less likely after the last couple of days than it did previously. Because of this, it looks as if there is a significant amount of pressure building up, and we could kick off a rather significant move. Keep in mind that the gap at the ¥137 level has been filled already, so it is possible that this market will continue to go beyond that, perhaps paying attention to the potential bullish flag that we are forming and if that’s the case, we could be looking at a massive move, possibly even to the 100% Fibonacci retracement level. That would be ¥145.