GBP/JPY Price Forecast – British pound bouncingThe British pound initially fell during the trading session on Tuesday, turning around later in the day to show signs of life. That being said, we have already broken below the 61.8% Fibonacci retracement level, which for me is crucial.
The British pound looks as if it is going to rally a bit against the Japanese yen, but at this point in time I think that the 61.8% Fibonacci retracement level is the gateway to much lower pricing, and the fact that we had not only closed below it but close below it rather significantly is a huge sign. The ¥138 level coincides with the 61.8% Fibonacci retracement level, and the fact that we had broken below there was such a nasty daily candle stick tells me that a lot of the support has been crushed.
GBP/JPY Video 05.06.19
At this point, it’s very likely that we could bounce towards the ¥138 level again, but I would expect to see a lot of resistance there. The fact that we have broken through the 61.8% Fibonacci retracement level typically means that we could go looking towards the 100% Fibonacci retracement level. This makes a lot of sense, as the British pound is still susceptible to problems with the Brexit, which seems almost never-ending. Beyond that, this is a pair that is highly sensitive to global risk appetite, which is in the tank at the moment. Even if we did break above the ¥138 level, it’s very likely that we could see the ¥140 level offer a significant amount of resistance. It’s not until we break above that level that I would consider buying this market. Currently, I think this is a market that is oversold, just as the stock markets are in the short term. All of that taken into account, it’s obvious that negativity still reigns supreme.
Please let us know what you think in the comments below