The British pound has initially pulled back during the week but turned around to show signs of life again. If we can break above the ¥150 level, the market should continue to go towards the ¥152 level. The candle stick is a bit of a hammer, so if we can break out it should show plenty of buying pressure underneath. If we do break down below the bottom of the candle for the week, we could pull back rather significantly. Overall though, I think that the market should continue to find buyers though, especially if the stock markets continue to show signs of strength and life.

However, if we get a general “risk off” move, that could break us down. Remember, this pair is highly sensitive to risk appetite, and of course the Brexit and the trade war. In other words, there are a lot of moving pieces right now, so any of this could cause issues or give us a boost. Overall though, I would expect a lot of volatility and I would expect eventually we break out to the upside. The ¥140 level right now seems to be the massive “floor” in the market going forward, and I think it’s only a matter time before that is seen as a historical low.

GBP/JPY  Video 08.10.18

This article was originally posted on FX Empire

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