The British pound has rallied a bit during the trading session on Tuesday but has given back some of the gains to show signs of hesitation yet again. Ultimately, this is a market that is trying to figure out whether or not it can hang onto the uptrend, or if a much deeper correction is needed. That being said, this is a market that I do think is paying close attention to the 50 day EMA, and if we were to break down below the Monday candlestick, that probably sends the pair down to the ¥145 level.
GBP/JPY Video 28.04.21
On the other hand, if we can break above the highs of last week then it opens up a move to the upside. We are still in an uptrend, so in a way it is going to be easy to be a buyer of this market, so a breakout to the upside is much easier to get your head around. That being said though, even if we did pullback to the ¥145 level it is likely that it would still just be a pullback in a longer term trend. That being said, breaking down below the ¥145 level would then have the market challenging the 200 day EMA, which of course would attract a lot of attention from traders around the world.
At that point, then I think you probably have something much more negative on your hands but in the short term a pullback is still just a pullback, not necessarily something that you should be overly concerned with. As far as the upside is concerned, that break above the weekly high last week would have the market looking towards the ¥155 level.
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