British pound rallies against Japanese yen into resistance

The British pound has rallied slightly against the Japanese yen during the trading session on Wednesday, reaching towards the 50 SMA on the hourly chart. This is a nice bounce, but the psychologically important ¥145 level has offered resistance so far, and I think this signifies that we will probably continue to go lower. At the same time, there are a lot of concerns around the world, and that tends to send this market lower over the longer-term. I think it is only a matter time before we sell off, reaching down to much lower levels. My target is still the ¥143.50 level again, and then eventually the ¥140 level. I believe that there is a significant amount of resistance above in the form of the previous uptrend line and of course the previously mentioned ¥145 psychological barrier.

If we do get some type of resolution to the Italian debt crisis, that could provide a bit of momentum to the upside but longer-term it looks as if the British pound is going to continue to struggle anyway, and that of course should continue to put downward pressure in this marketplace. Add to that the fact that we could get some type of geopolitical situation at any moment, then that means that we will probably continue to see selling pressure over here. I have no interest in buying, at least not until we cleared the 147.50 young level, which would be retaking the daily uptrend line that we had recently broken.