The British pound go sideways against Japanese yen on Tuesday

The British pound went sideways initially during the trading session on Tuesday, as we continue to use the 153 level as support. If you can deal with volatility, I still believe in the uptrend, but we need to get past concerns about a trade war, or an escalation of Syrian conflict, I think that the market should continue to go to the 155 handle. I believe that the 150-handle underneath should be support, and that the support should continue to be very important. In fact, we are essentially in the middle of a larger consolidation area that extends to the 155 handle, which I see as a very difficult area to break above.

Once we do break above the 155 handle, then I think we go to the 160 level. Short-term pullbacks should continue to be thought of as buying opportunities, as the market has certainly broken a significant resistance barrier. However, that’s not to say that there will be geopolitical concerns or headlines out there that could cause issues, but I look at those pullbacks and those issues as value in a marketplace that continues to be one that I believe retains its “risk on/risk off” dynamics.

If we were to turn around a breakdown below the 150 handle, the market could go to the 148 level, and it would call into question the lot of the bullish pressure. I think that we will need to take several attempts to finally break out above 155 though. That is my longer-term call.