- The British Pound has shown itself to be rather strong during the trading session against multiple currencies, but it's especially true against the Japanese Yen.
- The British Pound is trying to get to the 195 Yen level, a large round psychologically significant figure, and an area that's been important multiple times.
If we can break above the 195 yen level, then it's likely that we will go looking to the 198 yen level. Short-term pullbacks, I think, continue to be something that you need to watch closely due to the fact that the 200-day EMA is right at the bottom of the candlestick for the session.
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Underneath there, we also have the 50-day EMA, and I think that is something worth paying attention to as well. Ultimately, this is a market that will continue to be volatile. And I do think that the interest rate differential continues to favor the British pound in perpetuity.
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So, I do think that there will be buyers regardless. I have no interest in shorting this GBP/JPY pair unless there is some type of “massive risk off” move around the world. I just don't see that right now. So ultimately, I think you have to understand that this is a scenario where you're looking at each dip as a potential buying opportunity as it offers value. If we can clear that 195 yen level on a daily close, then I think you will see a lot of people rushing into the market to take advantage of cheap pounds. Ultimately, this is a carry trader's dream. And if we can get above the 195 yen level, then you will see more money flowing into this market, taking advantage of a potential move to 198 yen, possibly even the 200 yen level.
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