GBP/JPY Price Forecast – British pound at Powers higherThe British pound rallied significantly during the day on Tuesday, reaching towards a major downtrend line. It looks as if we are going to test the size, but don’t be surprised if we get some type of short-term pullback as there are a lot of moving pieces around the world that will continue to affect risk appetite.
The GBP/JPY pair has rallied rather significantly again during the day on Tuesday, as we approach major downtrend line. If we can clear the ¥148 level, the market will continue to go towards the ¥150 level, but right now I would anticipate that a pullback is very possible. After all, the Chinese are now taking their case to the WTO and levying their own tariffs. Beyond that, the Americans are already lining up to add their next round of tariffs, and it’s only a matter time before this spooks the market completely. Quite frankly, I’m a bit surprised it hasn’t already. We see a couple of small crashes, only to turn around and rally again. This pair does tend to follow the stock markets, which I think are treading on thin ice, although they are most certainly in a bullish mode.
At this point, it’s a bit too rich to start buying appear unless of course you already are in the trade. I be much more comfortable picking up a bit of value near the ¥147 level, or the break out as mentioned previously. Pay attention to global indices, they will continue to give us a bit of a heads up on where we are going next, and then of course the ever present Brexit headlines which will course move the British pound erratically. I think people are starting to price in a Brexit agreement and that’s been part of the bullish pressure here.