The British pound has rallied a bit during the course of the week, closing at a much better level than the previous week. This suggests to me that the market is likely to continue to see a lot of back and forth noise but given enough time I think that the market is trying to break out to the upside. The ¥153.50 level is the resistance barrier that we are and right now, but really at this point I think what we are looking at is a scenario where we are trying to break out for a bigger move, but we may need to work off a little bit of froth in the meantime. After all, we did shoot straight up in the air for quite some time, but I like this market for a longer-term move, based upon the reopening trade in the “risk on” type of situation.
GBP/JPY Video 03.05.21
At this point, it looks as if the ¥150 level is going to continue to offer support, and on the daily chart it most certainly looks as such. With this being the case, I like the idea of buying dips, but I also recognize that longer-term traders are probably going to need a bit of patience before we take off. This past week was a good sign, as we did make a higher high in relation to the previous candlestick, something that looked a bit ominous at the close. All things been equal, this is a market that I think has plenty of support underneath at the ¥145 level if we do break down. All things being equal, the market is likely to see more of a “buy on the dips” mentality.
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