British pound drops on Tuesday against Japanese yen

The British pound has been testing a major uptrend line of late, against both the Japanese yen in the United States dollar. I think that we are at a major confluence for the British pound and where we go next, but right now it certainly looks as if we are struggling to find upward momentum. While we have found a bit of support, we haven’t seen a lot of bullishness. I believe that paying attention to the GBP/USD pair is probably the best thing you can do for this market. Remember, the benchmark of most currencies is how they perform against the US dollar, so I think that the GBP/USD pair should be paid attention to as we are looking at the uptrend line that has held the market higher for so long been tested.

If we were to turn around and break above the ¥150 level, that would be a very bullish sign to the upside and I think at that point investors will come in and buy and hold this market. I believe that breaking above the ¥150 level would send this market much higher, perhaps reaching towards the ¥155 level. I believe until then, rallies are nice selling opportunities, just as a fresh, new low would be an opportunity to get very short of this market. On a breakdown, I believe we will go looking towards the ¥145 level rather quickly. Expect volatility regardless.