The Pound stays strong versus the Yen and breaks above the 171.00 level.

The Yen has been weakening today versus most of its major counterparts due to the strong Chinese fundamentals and merger and acquisition activity in Japan, which translates into more outflow of capital from the land of the rising sun. China was showing a lot of weakness lately on its economy, but today’s manufacturing reading was the highest it has been in five months. This has caused investors to leave the Yen and search for higher yielding assets.

That is why we see on the 4 hour chart below of the GBP/JPY, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/, that the pair has broken the 171.00 level to the upside and it is attacking the 200 period Exponential Moving Average (blue line). From this point on, the best thing to do is to stay patient and wait for confirmation of the breakout and then the pullback to the 171 or 200 EMA for a possible long entry.