British pound continues to find support against yen

The British pound initially fell at the open on Monday, reaching down towards the 150 level. The 150 level as you can see has caused a significant amount of support, just as it has been significant resistance in the past. I believe that the market will continue to look for buying opportunities, if we can stay above that crucial level. I think that the market will continue to find resiliency in this general vicinity, but if we break down below the 149.75 level, I think that we could unwind rather significantly. I think that the market will continue to be very noisy, but it typically is.

To the upside, I suspect that the market is probably going to go looking for the 152 level above immediately, and then perhaps even the 155-level based upon the longer-term charts. Ultimately, I anticipate that there will be a lot of volatility as per usual, but I also think that if stock markets can rally, that might be just enough to push this market to the upside as it is so highly correlated to risk appetite. I think you should probably pay attention to the S&P 500, Nikkei 225, and many other indices around the world. I think that if commodities can get a boost, that could also help although this pair isn’t as highly correlated to commodities as it is overall appetite for risk. When I look at this market, to me it looks as if the value hunters coming back in, so we could see a nice move if we can hold this level.