The British pound has pulled back over the last week but turned around to show signs of life in order to form a bit of a hammer. Ultimately, this is a market that should continue to see buyers based upon the fact that the British government is more united at this point after the election. At this point, we are testing the 200 week EMA which is a major trend defining EMA, and the fact that we have broken down through it and then turned around to bounce tells me that the market certainly has a lot of buyers underneath. The market had also formed a bit of a bullish flag before, and we pullback towards that area and found buyers at that general vicinity.
Ultimately, the market is based upon risk appetite and with the US/China trade situation likely to get better at this point, it makes sense that the Japanese yen will be sold in general. Looking at the longer-term chart, going back to 2016 and then July 2019, we have formed a bit of a “double bottom” at this point. All things being equal this is the beginning of a massive “W pattern”, and that could turn things right back around for the longer-term, perhaps the next several years. If that’s the case, 2020 could end up being a very good year for this pair. The British pound is extraordinarily cheap by historical standards, and therefore that will come into play as well. The Bank of Japan is likely to continue more quantitative easing based upon recent comments by Shinzo Abe, so therefore the Japanese yen will probably try to lose value going forward as well. This doesn’t mean that it will be easy, but longer-term it certainly looks as if we are going to continue to go higher, perhaps reaching ¥160 by the end of this coming year.
Ultimately, the market is based upon risk appetite and with the US/China trade situation likely to get better at this point, it makes sense that the Japanese yen will be sold in general. Looking at the longer-term chart, going back to 2016 and then July 2019, we have formed a bit of a “double bottom” at this point. All things being equal this is the beginning of a massive “W pattern”, and that could turn things right back around for the longer-term, perhaps the next several years. If that’s the case, 2020 could end up being a very good year for this pair. The British pound is extraordinarily cheap by historical standards, and therefore that will come into play as well. The Bank of Japan is likely to continue more quantitative easing based upon recent comments by Shinzo Abe, so therefore the Japanese yen will probably try to lose value going forward as well. This doesn’t mean that it will be easy, but longer-term it certainly looks as if we are going to continue to go higher, perhaps reaching ¥160 by the end of this coming year.