The British pound has pulled back just a touch during the trading session on Friday as we continue to see a little bit of noise after big moves. We broke out on Thursday to slice through the ¥155 level, so it might not be out of the question to pull back to that area in order to retest the area for support, or perhaps simply grind sideways to consolidate some of the momentum. I believe that given enough time we should continue to go higher though, as this was a major breakout. If the British pound can finally break above the 1.42 level against the US dollar, that will only turbocharge this move going forward.
GBP/JPY Video 31.05.21
Looking at this chart, we have been in an uptrend for some time so it should not be a huge surprise to think that we had to work off some of this, but as far as selling is concerned, I have no interest in doing so as we clearly are nowhere near reversing this trend. The size of the candlestick on Thursday alone is reason enough to get bullish again. Furthermore, this is more or less going to be a situation where value hunters will come back in and pick this up every time it drops based upon it offering value as we continue to see traders trying to get involved, and of course there will be short covering if we do pull back closer to the ¥155 level. I believe that we go looking towards the ¥160 level over the longer term but may have a little bit of work to do in order to stabilize first.
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This article was originally posted on FX Empire
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