The British pound fell during the week against the Japanese yen, reaching down towards the ¥145 level that extends support to the market. That support runs all the way down to the ¥144 level, so at this point it’s difficult to imagine a scenario where I would be a seller, at least not until we break below the ¥144 level. In fact, when you look at the chart, you can see that there is a massive bullish flag underneath that I have marked. That flag suggests that we are going to go looking towards the ¥155 level, which I also have marked on the chart.
Between here and there though, we have massive resistance just below the ¥150 level, and it is going to take a certain amount of bullish momentum to take that out. Keep in mind that the Brexit is still being dealt with, so it may take some time to get through there. If we get good news though, we should slice through it. If we were to break down below the ¥144 level, then I think we open the door to the ¥140 level and of course that would negate the bullish flag.
I suspect that there is going to be a short-term pullback that last week or two, but it should offer plenty of value underneath. You should look at this is a bullish market, but one that is still trying to build up enough momentum to change the overall trend. Again, I have no interest in shorting until we are well below the ¥144 level.
Between here and there though, we have massive resistance just below the ¥150 level, and it is going to take a certain amount of bullish momentum to take that out. Keep in mind that the Brexit is still being dealt with, so it may take some time to get through there. If we get good news though, we should slice through it. If we were to break down below the ¥144 level, then I think we open the door to the ¥140 level and of course that would negate the bullish flag.
I suspect that there is going to be a short-term pullback that last week or two, but it should offer plenty of value underneath. You should look at this is a bullish market, but one that is still trying to build up enough momentum to change the overall trend. Again, I have no interest in shorting until we are well below the ¥144 level.