The British pound rallied against Japanese yen in “risk on” move this past week

The British pound has rallied significantly during the week, breaking above the 153 level, and even the 153.50 level as I record this. I think that the market is going to go to the 155 level above, which is a psychologically important level, and has been structural resistance recently. It now looks as if we are going to continue the up-trending channel, so I do believe that we break above the 155 level eventually. That’s not to say that there will be some type of reaction there, obviously we could, but I think that the overall attitude of the market is obvious at this point.

Looking at this chart, I think that the 150 level should offer a bit of a “floor” now, and if we can break above the uptrend line that I have on the chart, we could go even further, perhaps extending to the 160 level. I believe that the downtrend in this pair is over, but it is going to be very noisy between here and 165, as there is a lot of clustering from a couple of years ago. Ultimately though, I think we are going to continue to be a “buy the dips” market unless something changes fundamentally as far as global risk appetite is concerned.