The British pound has rallied a bit during the trading session on Tuesday to reach towards the ¥153 level again. This is an area where we have been going back and forth and over the last several sessions, simply killing time before where we are getting ready to make some type of decision. For what it is worth, we should note that the most recent low was higher than the one before, and therefore we are showing signs of trying to break to the upside. That being said, you also need to pay attention to the fact that we have been drifting lower for a while, so we need to see a “higher high” in order to get long again.
GBP/JPY Video 11.08.21
If we do break to the upside, we could go looking towards the ¥155 level, where we have seen quite a bit of resistance previously. It is obviously a large, round, psychologically significant figure as well, so that is something that we should pay close attention to. If we do break above all that area, then it is likely that we continue to go much higher. To the downside, if we were to break down below that low that we made last week, then it almost certainly opens up a move down towards the ¥150 level underneath which is a major level and of itself as well. Breaking down below there would then open up the possibility of a much bigger move to the downside. In general, I think what we are going to see is a lot of choppy behavior in the short term while we try to figure out the overall risk appetite out there.