GBP/JPY Price Forecast – British Pound Awaits Brexit Deal Yet Again

The British pound has rallied a bit from the 50 day EMA on Wednesday as we await to see some type of resolution with Brexit negotiations. The 50 day EMA has been influential for some time now, and then of course extending down to the 200 day EMA we have seen buying pressure. All things being equal, this is a market that should try to go looking towards the ¥140 level on the first hints of good news. Looking at this chart, it is obvious that the market wants to break to the upside, perhaps even breaking above the ¥140 level, but we need some type of good news to make that happen.

GBP/JPY Video 24.12.20

Keep in mind that holiday trading is very thin, and therefore the moves could be very erratic and therefore we could get a sudden move in either direction. Nonetheless, we still have not filled the gap above them, so I think that will also act as a bit of a magnet for price. On the other hand, if we break down below the 50 day EMA we probably will go looking towards the 200 day EMA only to turn around again, unless of course we get some kind of definite “no deal Brexit.”

That being said, it seems very unlikely because even though there has been a lot of negativity at times, the reality is that negotiators keep coming back, so it is obvious that they truly do want to get this worked out. This is obviously a case of not paying attention to what they say but pay attention to what they do situation.

For a look at all of today’s economic events, check out our economic calendar.