The British pound has initially pulled back a bit during the week but turned around to show plenty of bullish pressure. The market looks as if it is trying to get to the ¥150 level, an area that will certainly be very important to the longer-term health of the British pound against the Japanese yen. Remember that this pair is highly risk sensitive, but I think that the underlying fundamentals of interest rate differential will continue to work against the Japanese Yen overall. This will of course show itself in this pair as it would any other.

There are a couple of hammers recently, and I think that if we can stay above this hammers it’s very likely that we will eventually reach towards the ¥155 level above, which was an area that has been significant supply. This is the area that the market broke down through during the Brexit boat, and I think that once we clear that area this pair will go much higher, although there is obvious resistance above there as well. Keep an eye on the trade war and the situation with Teresa May, as it will have an effect on the British pound overall. I think that it will be noisy, but short-term pullbacks should be looked at as potential buying opportunities for those who are looking for value. Continue to look for that value and take advantage of it in the meantime.

GBP/JPY  Video 16.07.18

This article was originally posted on FX Empire

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