The British pound initially rallied a bit during the trading session after gapping lower against the Japanese yen, only to turn around sir falling again. The ¥155 level underneath is an area where I do believe that a lot of people will be interested in, as it is a large, round, psychologically significant figure. This of course is an area that we smash through last week, so I think at this point in time it will be a “buy on the dips” type of situation. After all, this is a market that should continue to find plenty of interest as it is obviously in a bullish trend, and I think that is going to continue based upon the fact that the British pound itself has been one of the better performers.
GBP/JPY Video 01.06.21
Beyond that, the Japanese yen has been hammered against most currencies, so this all kind of ads up for a bigger move. Furthermore, if we get some type of “risk on attitude” around the world, then it is likely that we will continue to see this market rise. When you look at the impulsive candlestick from last week on the breakout, I would certainly think that it is only a matter of time before traders jump back in and take advantage of what has been an obvious shift in momentum again.
That being said, we are a bit stretched from a longer-term perspective, so if we do not turn around and bounce right away, we may have to spend some time going sideways in order to work off some of the froth that we have seen as this pair has been so bullish for so long.
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This article was originally posted on FX Empire
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