The British pound initially tried to rally during the trading day on Tuesday, reaching towards the 148.50 level until we rolled over, forming a shooting star on the hourly chart and then breaking down below the 147.50 level. This market continues to be one that sells rallies off, and on the first signs of exhaustion it’s time to start selling again. I think that the market is going to go looking for the 145-handle underneath, which is massively supportive. I have no interest in buying this market, because the British pound has gotten beaten down, and of course the Japanese yen is starting to strengthen against several other currencies around the world in a bit of a “risk off” move. With this type of negativity, I look at every rally as an opportunity to pick up the Japanese yen “on the cheap.”
If we managed to break above the 149 handle, I would be impressed, until then I think that the market is going to continue to be very difficult to buy, but selling is easy. It just comes down to being patient enough to get a decent entry price, which of course where the waiting for a rally comes into play. I would also be a seller below the 147 level, as it would be yet another barrier that’s been taken out. Volatility will continue to be a major issue in this market, but certainly there seems to be more negative pressure than bullish over the longer term. The market should continue to offer plenty of opportunities if you are patient enough. Nonetheless, I certainly have a negative bias in general, and therefore will ignore buying opportunities until we either break the 149 level to the upside, or a bounce significantly from the 145-handle underneath.
GBP/JPY Video 29.11.17
This article was originally posted on FX Empire