Potential signal
- I am buying here.
- I will have a stop just below 214, and a target just below 216.
The British pound initially fell during trading on Wednesday against the Japanese yen as we continue to see a lot of noisy trading, but quite frankly, I think you have a situation where traders still continue to look to the upside overall as the interest rate differential pays you to hang on to this market and I think will continue to be a major focus.
The 214-yen level below is an area that I think will continue to be a bit of a floor as previously had been a bit of resistance. Ultimately, this is a market that also pays attention to the 50-day EMA below that also offers support, and I do think that anytime we drop, it makes quite a bit of sense that we would see buyers coming in to take advantage of cheap British pounds.
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Key Technical Levels and Market Outlook
The 216-yen level above is a major area of interest as it was a major swing high and it's basically where we were when the Bank of Japan intervened a while ago. The intervention was short-lived and we've since then seen quite a bit of choppy behavior that still has a major hint of positivity to it as traders are focusing on the fact that there's only so much that the Japanese can do.
With this, I am bullish and I look at every drop in this market as a potential opportunity to take advantage of what has been a massive bullish run until the last couple of months. If we can break above the 216.50-yen level, then I believe that we will start to take off to the upside. Ultimately, I do believe we break out and I think longer term this goes much higher.
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