British Pound Continues to Struggle on Break Out During the Week

The British pound has gone back and forth during the course of the trading week, showing signs of hesitation on the attempted breakout, and now it looks as if we are going to settle on a relatively neutral candlestick. Because of this, I do not think that the pair can break down until we get some type of resolution to the Ukraine/Russia issues. With that in mind, the market is more likely than not going to continue to be a situation where we are moving on the latest headline. That being said, there is a significant amount of support underneath at the ¥155 level, an area that has been tested a couple of times recently. If we were to break down below there, it could open up the possibility of a move down to the ¥152.50 level.

GBP/JPY Video 21.02.22

To the upside, it looks as if the ¥158 region will continue to be an area that is going to be difficult to break above, but if we did have that happen, probably on good news from a geopolitical aspect, then the market is more likely than not going to become more of a buy-and-hold situation. In that scenario, the market continues to see a lot of noisy behavior, so I think you need to be conscious with your position size but if we do break out to the upside, I might become a bit more aggressive. To the downside, it will probably be more or less a choppy behavior, so I do not know that I would be as aggressive with shorts at the moment as we have been so positive over the last several months.

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