GBP/JPY Price Forecast – British pound breaks down against Japanese yen to test support

The British pound broke down significantly during the trading session on Thursday to kick it off, testing major support underneath. The ¥144 level should be significant support, so if we break down below there we could see a significant break down.
Christopher Lewis
GBP/JPY daily chart, April 26, 2019

The British pound broke down significantly during the trading session on Thursday, reaching down towards the ¥144 level. At this point, if we make a fresh low, we could send this market much lower, and it should be noted that the British pound has broken down against the US dollar. We can start to make an argument for a descending triangle, so at this point we could see the market reaching down towards the ¥140 level.

GBP/JPY  Video 26.04.19

The market in this area could find a bit of support, and if that’s going to be the case it’s very likely that the market could reach towards the ¥145 level, but quite frankly there’s no reason to think that the British pound is going to strengthen in general. After all, we have the Brexit delay, which isn’t necessarily a bad scenario, but it isn’t necessarily good when either. We may have months of back and forth headlines, and therefore I think that it’s likely that the British pound simply struggles in general, not necessarily melts down.

To the upside, I think that we have a lot of resistance at the ¥147 level, and I’d be a bit surprised to break out above there. In this environment, we are looking at either consolidation or a break down. I don’t think that it’s going to be anything different, so therefore I remained somewhat bearish. I have already shorted the British pound against the US dollar, and will be waiting to see whether or not we make a move below the ¥143.50 level, which would be a clear violation of the support underneath.

Please let us know what you think in the comments below

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