GBP/JPY Price Forecast – British Pound Bounces From 200 Day EMA

The British pound has broken down significantly during the course of the trading session on Friday, as more concern about yet another coronavirus variance hit the wires. That being said, we touched the 200 day EMA and then shot straight up in the air. Quite frankly, I think a lot of what we have seen has been a bit of a “knee-jerk reaction” in what would have been somewhat thin markets. Remember, the day before was Thanksgiving in the United States, so a lot of north American traders were even at their desks when this happened.

GBP/JPY Video 29.11.21

The ¥152.50 level being broken above would be a huge victory for the buyers, and at this point it looks very possible. As far as selling is concerned, we need to break down below the 200 day EMA to truly fall apart. At that point, we would almost certainly test the ¥150 level, which is what I look at as the “floor in the market” for the buyers. Breaking down below all of that would send this into a massive downtrend, or than likely causing massive destruction.

The pair is highly sensitive to risk appetite, which of course is waning at the moment. Nonetheless, if we do find ourselves breaking above there, then it is very likely that the entire thing would have been shrugged off as far as the virus is concerned, which is something that the markets have done multiple times. Because of this, I remain optimistic, but I also recognize you probably have to deal with quite a bit of volatility in the process of trying to recover. Quite frankly, the biggest regret I have on this chart is that I was not awake to see it touched the 200 day EMA.

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