British pound falls initially against Japanese yen on Tuesday but bounces

The British pound has fallen somewhat significantly against the trading session on Tuesday, reaching down towards the ¥143.50 level, an area that I said could be targeted if we break down below the ¥145 level. Now that we reach that level, we have also bounced from there to try to reach towards the ¥145 level again. I think the market will eventually sell off, so I’m looking for signs of exhaustion to start shorting again. I believe that the British pound is continuing to struggle against both currencies around the world, and that being the case I’m looking for an opportunity to take advantage of what has been a fairly significant break down.

The alternate scenario of course is that we break above the previous uptrend line, which would be closer to the ¥147.50 level. However, I don’t think this market will be able to get to that level, and I will be looking for an exhaustive candle to start shorting again. I think that the market will continue to follow the overall trend, so therefore I think that this could offer a nice opportunity on the bounced to short the British pound again if you have not been involved. On the hourly chart, the 50 simple moving average has been somewhat reliable, which lines up nicely with the previous highs. I think that eventually we will go down to the ¥140 level given enough time.