The British pound has rallied rather significantly during the course of the trading session on Thursday to break above the ¥155 level. This of course is an area that could cause a certain amount of trouble, but I also believe that we need to see whether or not we can continue to go higher, or if a pullback is necessary. Regardless, this is a market that obviously cannot be shorted anytime soon, so that needs to be kept in the back of your mind.
GBP/JPY Video 15.10.21
The ¥152.50 level should be a significant floor in the market, so with that in mind, as long as we can stay above there are still need to look towards the market through the prism of buying on the dip. It is obvious that the Japanese yen is in serious trouble, and with that being the case is likely that the market should continue given enough time. That being said, we have been a little bit parabolic and therefore I think what we need to also keep in the back of our mind is that you should be looking for value. Simply buying at this level is going to be difficult, and of course very risky. However, if we clear the ¥156.50 level, then we are through all of the resistance.
If we are to take out the ¥152.50 level, that could change a lot of things but quite frankly this is a market that looks like it is hell-bent on trying to break out to the upside for a bigger move. Whether or not that actually happens, we need to wait for a day or two, but it certainly looks very likely at this point.
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This article was originally posted on FX Empire