The British pound has pulled back a bit to kick off trading on Thursday, as we continue to see a bit of “risk off” when it comes to the British pound and perhaps risk appetite in general. That being said though, I think that the 50 day EMA is going to come into play somewhere closer to the ¥142 level so I like the idea of picking up a bit of a pullback. Because of this, it’s very likely that the market will continue to find plenty of noise to trade upon. Remember, it’s the beginning of the year so traders are going to be putting positions on for longer-term moves, and most certainly the British pound is likely to make one of those longer-term moves.
GBP/JPY Video 03.01.20
With Brexit being worked out, it’s probably only a matter of time before the British pound continues its surge higher and it should be noted that most British pound pairs have formed a bullish flag that lead the way going higher. That doesn’t mean that we go straight up in the air, but it does mean that eventually the momentum should continue to pick up to the upside. I don’t like selling the British pound, but I recognize that you can’t simply jump in with both feet and take advantage of this trend. There will be sharp pullbacks based upon headlines and exhaustion, and that might be what we are seeing right now. Nonetheless, I still believe this pair goes looking towards ¥150.
Please let us know what you think in the comments below