The British pound initially rallied during the trading session on Monday but gave back gains closer to the ¥150 level. Because of this, it looks like we are going to continue to struggle, and it is also very interesting to pay close attention to this because it could in theory at least set up a potential shorting opportunity. The reason I say this is because the most recent high fell quite short of the previous one, and it has been very noisy up in this area. If we were to break down below the ¥149 level, I think at that point the market is probably going to give up some of the bigger gains that we have seen of the last several weeks.
GBP/JPY Video 27.04.21
On the other hand, if we can get a daily close significantly above the ¥150 level, then it is possible that we could see a bit of a revival of the uptrend. Right now, that does not look like it is going to happen, at least based upon the early action. Even then, the market would have to deal with the ¥152 level as a potential barrier, but if we were to break above that recent high from last week, then it opens up a potential move all the way back to the longer-term highs and further towards the ¥155 level. As things stand right now, we are more likely than not to see a lot of choppy behavior more than anything else, so keep that in mind as you will need to keep your position size under control.
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