British pound recovers against Japanese yen on Wednesday

The British pound rallied slightly against the Japanese yen in early trading on Wednesday, but then pulled back rather significantly. From the 151.25 level, we found enough buying pressure to turn things around and send the market much higher. By doing so, the market looks as if it is going to try to break above the 152 level, which could open the door to the 153 level, followed by the 155 level. I believe that the market will continue to find buyers on dips, now that we have broken above the previous uptrend line on the daily chart. By doing so, it shows signs of strength in the market that look rather convincing.

I believe that the pullbacks will continue to be a major issue, but eventually we will find the strength to recover, as it seems to be more of a “risk on” environment now that the Chinese are trying to calm down the rhetoric between the US and Beijing. If that’s the case, we should continue to see people by this pair as it is very sensitive to stock market movements and of course the overall attitude of trading around the world.

If things do heat up between the Chinese and the Americans, we could breakdown, perhaps testing the 150-level underneath. A breakdown below that level could send this market much lower, although I believe that the buyers are in control now.