By the time Friday rolled around, the British pound was in familiar territory, as we were threatening the ¥139 handle. This is an area where we have seen quite a bit of resistance recently, so do not be surprised at all to see a little bit of a pullback. That being said, the market is certainly one that you do not want to short, and the fact that we have attacked this area again tells me that there is significant demand. With that in mind, I like the idea of buying dips and will not be selling this pair anytime soon, at least not until it breaks down below the ¥135 level. Ultimately, this is a market that I think will eventually see a lot of noise, as it is pushed around by multiple things at the same time.
GBP/JPY Video 03.08.20
The British pound itself is strong but eventually people are going to think about the Brexit situation again, and that of course is something that is worth paying attention to. With that being said, I think that it is only a matter of time before we start talking about that, but in the meantime, it certainly looks as if the British pound is trying to make a bigger move. If we can break above the ¥140 level, the next target would be closer to the ¥145 level. We have been basing for some time going back a couple of years, so who knows, this might be where we change everything. Be cautious with your position size and look for value.
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This article was originally posted on FX Empire