The British pound has significantly rally during the day overall, and the market has been very bullish on Friday as well. Because of this, I think it’s likely that we continue to see momentum building exercises present themselves, and I think that short-term pullbacks are buying opportunities as we should then try to break above the 153 handle. Once we do, that is a major barrier that the market had recently cleared for the short term. If we can finally make a fresh, new high, that signifies that this pair probably goes to the 163 handle later.

In the meantime, I think that pullbacks are buying opportunities, as the 150 level has offered a major support barrier. That is the area that of course was always going to offer a significant amount of support based upon the large, round, psychologically significant number. In fact, it’s not until we break down below the 150 level that I would consider selling. I think that pullbacks offer value, as the British pound has been showing significant strength over the last year, especially as the US dollar. This market breaking above to a fresh, new high signifies that there would be more of a “risk on” attitude in the markets in general, and that’s almost always good for this pair. The 153 level will probably offer a bit of noise, so if you do go long between now and a breakout of that level, I would add slowly, and then become more aggressive once we reach the fresh, new high.

GBP/JPY Video 16.01.18

This article was originally posted on FX Empire

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