The British pound formed a shooting star on Monday, and on Tuesday we broke down below the bottom of it. While this is a short-term negative sign I believe that there is plenty of support below at the ¥145 level, extending all the way down to the ¥144 level. Overall, I think there is a lot of support in that area as we have seen, and beyond that we have the 200 day EMA acting as support. That being the case I’m looking for the market to bounce from that area and as I am bullish I believe that the market will find plenty of buyers in that area.
GBP/JPY Video 17.04.19
When you look at the longer-term chart, you can see that there is a bullish flag that I have marked. That bullish flag should continue to attract a lot of attention and it does measure for a move to the ¥155 level. However, between here in that area we have a lot of resistance near the ¥150 level, which starts at roughly ¥148.50. With that being the case it’s very likely that we are going to continue to see choppiness and consolidation as we try to build up the necessary momentum to make it to that level.
In short, I believe that buying the dips will be the best way to play this market and I do fully anticipate that the market will break out eventually. That being said, I recognize that we have some work to get it to happen, and we probably need good headlines out of the Brexit.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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