The British pound has rallied significantly during the course of the trading week to reach towards the ¥153 level. That being said, it looks as if we are trying to build up enough momentum to continue going higher. However, we have recently just seen a little bit of a pullback and therefore I think it is likely that we need a little bit more in the way of a pullback in order to continue the overall shot higher. That being said, I certainly would not be a seller of this pair, and I think that pullbacks should be looked at as a welcome turn of events.
GBP/JPY Video 05.04.21
To the downside, the market is likely to see the ¥150 level underneath as a support level, and I would not be surprised to see a pullback towards that area before breaking out. However, we could just simply break above the ¥155 level, which would open up the possibility of going much higher. That being said, I think that either way you have to look at this through the prism of going long and never shorting it. At least not anytime soon. If we were to break down below the hammer from the previous week, that could open up the possibility of a move down to the ¥145 level.
Looking at this chart, I think the one thing that you can probably anticipate is plenty of buyers are willing to get involved in this market if they get the opportunity at a better price. The size of the candlestick is of course very impressive, so that tells me there are plenty of bullish traders out there still.
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This article was originally posted on FX Empire