British pound rallies against Japanese yen begins by gains

The British pound initially rallied during the week but found enough resistance at the 50 SMA on the weekly chart to turn around of form a shooting star. The shooting star of course is a negative candle, but I also recognize that there is a massive hammer at the ¥145 level underneath, offering a significant amount of support. With that being the case, it’s likely that the market will put up a fight, and the British pound itself looks as if it is trying to pick up some momentum.

The action looks to me to suggest that although we do see a significant amount of support, but the short term markets could be very choppy and sideways. I think that this market will continue to show a lot of noisy attitude, and of course proclivity to react to geopolitical events and headlines. I think that it’s only a matter of time before we do go higher though, if we can stay out of a trade war or avoid some type of escalation on that front. With the North Koreans and the Americans can come to some type of agreement, that will almost certainly push this market to the upside as well. I do believe that this pair will follow the stock markets overall. If we break down below the hammer from the previous week, that should send this market down to the 140 handle.