The British pound has rallied a bit during the course of the trading session on Friday to reach towards the ¥152 level. This is an area where we start to see trouble though, and although we have recently made a slightly higher high, the reality is that the market still is looking very choppy in this general vicinity. Because of this, I think that the market is probably going to continue to see very noisy behavior, and therefore you have to be very cautious with your position size. It is obvious to me that the ¥152.50 level has been a massive resistance barrier, so would not surprise me at all if we simply chop back and forth in a bid to destroyed accounts along the way.
GBP/JPY Video 04.05.21
If we do break down from here, the ¥150 level becomes important, not only from a psychological standpoint but also the fact that the 50 day EMA is starting to reach towards that level. On the other hand, if we were to break above the highs from last week, it is very likely that the ¥153.50 level would be the next target, followed by the ¥155 level if the market can break out to the upside. If we break down below the 50 day EMA, then it is very possible that we could go looking towards the ¥145 level, which is an area that the 200 day EMA is an indicator that a lot of people will pay close attention to. Breaking down below there would then open up what could be a potential downtrend. That does not look likely to happen now.
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