The British pound rallies against Japanese yen on Friday, but gives back most of the gains

The British pound rallied a bit during the trading session on Friday, reaching towards the previous uptrend line before rolling over and forming a shooting star. The shooting star shows signs of resistance and perhaps weakness in this market. At the very least, it shows signs of indecision as we have a hammer from Friday as well. I believe that the market should continue to be very noisy around the 150 handle, and I believe that the market breaking down below the hammer from the Wednesday session would roll this market over rather significantly. On the other hand, if we can break above the top of the shooting star, the market would continue to go towards the 155 handle.

This is a market that is very risk sensitive, so keep that in mind as the conversation between China and the United States continue to cause issues. If there is head of a trade war, that should send this market right back to the downside, while at the same time if we get signs of some type of agreement the market should continue to go higher, perhaps reaching towards the 155 handle. I believe that this market will continue to be very noisy, and therefore it’s going to be difficult to hang onto a position for any significant amount of time. At this point, a break above the top of the shooting star is a buy signal, while a break below the hammer is a cell signal. Until then, I’m staying on the sidelines.