- The British pound has rallied rather significantly during the trading session on Friday, as we continue to see traders take advantage of the interest rate differential that exists in this market.
- Short term pullbacks at this point and then continue to be buying opportunities.
- That’s been the case for several months now, and a distal see how the changes anytime soon as long as you continue to get paid quite well to hang on to this pair.
- In fact, every time I pulled back I started thinking about adding more.
I don't see much to keep this market from going to the ¥200 level. With this, I think the GBP/JPY market is going to continue to be one that is strong, and I also recognize that any short term pullback during the next couple of days will more likely than not just attract more buyers. The ¥95 level could be a support level.
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Support Below
The 50 day EMA almost certainly will be underneath and then of course, the ¥190 level is what I think is a flaw in the trend. Now granted, that's seven and a half handles lower, but it shows you just how far below we have support. The interest rate differential continues to favor the British pound, and I think people will just simply hold on to this pair.
Due to that, the ¥200 level is going to be difficult to overcome. But if and when we do, then we just continue the next leg higher. I have no interest in shorting this market. The interest rate differential is far too strong, and therefore I just don't want to pay for the privilege to do so with this. I think the Bank of Japan has done what it can to slow the ascent of other currencies against the yen down, but really, there isn’t a whole lot they can do. They can't do it with the massive debt load of Japan. They can't afford higher interest rates of any substance.
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