GBP/JPY Price Forecast – British pound chops against Japanese yen

The British pound has gone back and forth during the trading session on Friday heading towards the central bank statements coming out of Jackson Hole. That being said, I think really what people are looking for is whether or not there is going to be more or less risk. The Chinese have retaliated against US tariffs, so that of course has people concerned. Beyond that, we also have the Brexit out there, which of course isn’t getting any better anytime soon. With that being the case, it will weigh upon the British pound anyway. Because of all of this I think there’s only one way to play this market, simply looking for signs of exhaustion to sell after short-term rallies. With that, I am someone who has to be very patient in order to take advantage of the longer-term trend.

GBP/JPY  Video 26.08.19

To the upside, the 50 day EMA is starting to grind towards the ¥132.50 level, which features a micro cluster of trading action as well. That being the case, I would be very interested in some type of exhaustion candlestick in that area and would be more than willing to take advantage of it. If we break above there, then the ¥135 level would be targeted. All things being equal, I don’t have any interest in buying this pair unless there is some type of resolution to the Brexit. Quite frankly, if I want to play the “risk on” trade, I’d be more apt to buy NZD/JPY or perhaps CAD/JPY.

Please let us know what you think in the comments below