The British pound rallied significantly during the course of the trading session on Tuesday in early trading but gave back the gains to show a little bit in the way of lackluster momentum. Ultimately, the market is still in an uptrend, but it should be noted that it is going to be difficult to get overly aggressive at this point, perhaps waiting for some type of pullback in order to get to the upside again.
GBP/JPY Video 21.04.21
If we can break above the top of the candlestick for the trading session, that opens up a move towards the highs again, but keep in mind that this pair does tend to be very volatile and rocky, so you need to be cautious about your trade size. Obviously, we have seen a lot of momentum in both directions over the last couple of months, but the longer-term attitude is most certainly to the upside, so you need to keep that in mind. I like buying dips, just as I do not like shorting this market.
In fact, it is not until we break down below the 50 day EMA that I would be short of the market, and even then, I would have to rethink the entire situation. At that point, we would probably pull back towards the ¥145 level, which is a large, round, psychologically significant figure, and of course where the 200 day EMA seems to be racing towards that area. That obviously would answer whether or not we are in an uptrend again, but until we break down below that I think it is safest to play this market to the upside, despite the fact that it has been a bit rough during part of the session on Tuesday.
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