British pound rallies against Japanese yen on volatile Friday

The British pound rallied significantly during the trading session on Friday, breaking above the 146 handle. The market looks likely to continue going higher, perhaps reaching towards the previous uptrend line before finding significant resistance. Short-term traders will probably continue to favor the upside, and I think that signs of exhaustion on a daily candle is probably what people are going to be looking to short. This will be exacerbated by geopolitical concerns, perhaps headlines over the weekend. I think that given enough time, the markets will determine where they want to go, but in the short term it looks very obvious that it’s going to be to the upside.

If we were to break above the top of the previous uptrend line, that would be a very bullish sign and I think that we could continue to go much higher. The ¥150 level would be the next target after that, as it is a large, round, psychologically significant number as well as a structural resistance and support barrier.

I think that the market will eventually roll over, and I think that might be the story of the summer. This will be especially true if the trade war situation heats up, but right now it seems as if everything is somewhat measured. A certain amount of patients will be needed to sell this market, but if you are a shorter-term momentum base trader, then buying is something that you can do in the meantime.