(MENAFN- Daily Forex)

• The British pound strengthened against the Japanese yen on Friday, stabilizing near the 50-day EMA after retesting the 200 yen level.
• With the BoE holding firm and the yen remaining weak, bullish momentum may extend toward 204 yen.

The British pound has rallied a bit against the Japanese yen during trading on Friday as the market continues to see a lot of volatility in general. We are sitting right around the 50-day EMA, which of course, is an indicator that a lot of people will pay close attention to. It's worth noting that the last couple of days have broken below the 200 yen level.

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The 200 yen level is an area that is a large, round, and psychologically significant figure, but it was also the beginning of the gap that we just filled. By filling this gap, it does look like we're doing everything we can to continue the uptrend, and with the Bank of England showing a little bit of hesitation to cut rates, this gives us more of a reason to think that the pound may actually be okay by the time it's all said and done.

EURUSD Chart by TradingView

Keep in mind that the Japanese yen is very weak in general, and I think that's the main driver of what happens here. The Japanese yen has been extraordinarily weak, and I don't see that changing anytime soon, given the fact that the Bank of Japan has no real shot at trying to tighten monetary policy. Short-term pullbacks at this point in time should continue to be buying opportunities, and I do think that eventually we'll go looking to the 204 yen level.

If we broke down below the 199 yen level, then we would test the 200-day EMA, which is a major indicator as well. Anything below there really opens up the downside, and we could see this market completely fall apart.

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