GBP/JPY Price Forecast – British Pound Bounces Against Japanese Yen

The British pound has been rallying a bit ahead of the Brexit vote in parliament, which contains no possibility of extension in splitting from the European Union. It also suggests that the United Kingdom will be following any rules at all mandated by the EU, so at this point it’s likely that the market will focus on what’s next. Quite frankly, the massive selloff has been overdone during the last few days when Boris Johnson announced that he wasn’t going to ask for an extension. The pair is highly sensitive to risk appetite though, so you should pay attention to that as well.

GBP/JPY  Video 23.12.19

If the markets get more of a general “risk on” type of feel, then various things could continue to come into play to push the British pound higher. We clearly are in an uptrend anyway, and this pullback has offered a buying opportunity for those willing to step in and try to gain based upon the longevity of this uptrend. The bullish flag that I have marked on the chart of course is crucial, and measures for a move towards the ¥150 level. This doesn’t mean that we will get there overnight, but clearly that is the directionality of the market more than anything else. Beyond that, if we can get stock markets rally around the world then this pair should continue to go much higher. Short-term pullback should continue to offer buying opportunities, but we are getting close to that time a year where there is very little in the way of liquidity due to the holiday season. Keep your position size small but I am still constructive.

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