British pound has rallied against the Japanese yen during trading on Tuesday as we continue to see the overall uptrend hold.
Ultimately, this is a market that I think continues to see the 214 yen level as significant support.
This is an area that continues to be important, and should continue to be monitored.
To the upside, you have the 216 yen level, an area that I think a lot of people will be watching very closely. If we can break above there, then it's likely that traders will continue to pile into the GBP/JPY pair. After all, this pair does pay you at the end of every day because of the swap, the interest rate differential between the two currencies is pretty wide, and I think that has a lot to do with what we can expect next.
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The Bullish Flag Target
I don't necessarily think that we have a huge amount of momentum at the moment, but eventually we should break through the barrier. If and when we do, the measured move of the potential bullish flag is for a move to the 222 yen level. When you look at longer-term charts, it is an area that has been important.
On the other hand, if we were to break down below the 214 yen level, then it's possible that the market could test the 50-day EMA at 212.24, but I don't really think that's going to happen. I think the British pound continues to shine against the Japanese yen, and I have no interest whatsoever in shorting. The lower it goes, the more likely I am to buy the first significant bounce.
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