The British pound initially tried to rally during the trading session on Tuesday but gave back the gains early in the day as we continue to hang around the ¥153.50 level. This is an area that of course has been resistance previously, and now it looks like we are trying to build up a certain amount of momentum in order to take off. Given enough time, it is likely that the market will continue to go higher as we are in an uptrend, but we may get a short-term pullback in order to build up the necessary momentum.
GBP/JPY Video 12.05.21
Underneath, I see the ¥150 level as a potential support level, as it is a large, round, psychologically significant figure but it also features the 50 day EMA. Furthermore, one thing that we could take a look at is that there is a gap from the beginning of the Monday session that has not quite been filled, so I would anticipate that somewhere around the ¥152 level we should see support as well.
I do think that given enough time the buyers will return though, as the Japanese yen is on its back foot and it certainly looks as if we are starting to pick up a certain amount of momentum, and it is also worth noting that the risk appetite around the world will be a major influence on where we go next. Currently, it appears that there is plenty of risk-taking out there but having said that it makes me still bullish of this market and since we did make a fresh eye, I think it is only a matter of time before we go to the ¥155 level. It may take a while, but that still my target.
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This article was originally posted on FX Empire